Leleu N.O and Another v Numacon (Pty) Limited and Others (19065/2024) [2025] ZAWCHC 192 (5 May 2025)

Leleu N.O and Another v Numacon (Pty) Limited and Others (19065/2024) [2025] ZAWCHC 192 (5 May 2025)

The court found that the valuer exceeded his mandate by applying portfolio valuation and marketability discounts, which were not authorized by the settlement agreement and fell outside his expertise. The settlement agreement only permitted consideration of a minority discount, and any variation required written agreement by the parties. The application of unauthorized discounts constituted a unilateral and irrational variation, resulting in an inequitable outcome for the applicants. The court held that acceptance of payment did not amount to a waiver or compromise, as there was no clear and unambiguous intention to relinquish the right to review. The valuation was reviewable and set aside...

Citation
[2025] ZAWCHC 192
Parties
Applicant: Herwig Tillo Cornelius Leleu N.O.; Applicant: Marleen Augusta Marie Leleu N.O.; Respondent: Numacon (Pty) Limited; Respondent: Michael Ioannou; Respondent: Adam Bhayat N.O.; Respondent: Rashida Bhayat N.O.; Respondent: Ruchsana Bhayat N.O.; Respondent: Gadija Bhayat N.O.; Respondent: Hyman Bruk N.O.; Respondent: Vrees Investments (Pty) Ltd; Respondent: Xenophon Demetriades N.O.; Respondent: Joan Demetriades N.O.; Respondent: Alexandra Marika Demetriades N.O.; Respondent: Kimon Andreas Demetriades N.O.; Respondent: Helen Constantinides N.O.; Respondent: Christodoulakis Constantinides N.O.; Respondent: Demetrios Constantinides N.O.; Respondent: Maria Constantinides N.O.; Respondent: Lukas Cornelius Serfontein (Snr) N.O.; Respondent: Lukas Cornelius Serfontein (Jnr) N.O.; Respondent: Philippus Carel Prinsloo N.O.; Respondent: Gordon Mann N.O.; Respondent: Sonja Mann N.O.; Respondent: Entegra Trust (Pty) Ltd; Respondent: Bernard Katz
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
5 May 2025
Case Number
19065/2024
Procedural Posture
Review Application / Opposed Motion for Review of Valuation and Related Declaratory Relief
Outcome
Application granted. The valuation report is reviewed and set aside to the extent it applied unauthorized discounts. Respondents ordered to pay recalculated amount and costs.
Judges
Slingers
Legal Topics
Share Valuation, Companies Act Section 163, Compulsory Buyout, Settlement Agreement Interpretation, Minority Discount, Review of Expert Determination
Commercial and Corporate Share Valuation Companies Act Section 163 Compulsory Buyout Settlement Agreement Interpretation Minority Discount Review of Expert Determination

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Parties

Herwig Tillo Cornelius Leleu N.O.

Applicant

Marleen Augusta Marie Leleu N.O.

Applicant

Numacon (Pty) Limited

Respondent

Michael Ioannou

Respondent

Adam Bhayat N.O.

Respondent

Rashida Bhayat N.O.

Respondent

Ruchsana Bhayat N.O.

Respondent

Gadija Bhayat N.O.

Respondent

Hyman Bruk N.O.

Respondent

Vrees Investments (Pty) Ltd

Respondent

Xenophon Demetriades N.O.

Respondent

Joan Demetriades N.O.

Respondent

Alexandra Marika Demetriades N.O.

Respondent

Kimon Andreas Demetriades N.O.

Respondent

Helen Constantinides N.O.

Respondent

Christodoulakis Constantinides N.O.

Respondent

Demetrios Constantinides N.O.

Respondent

Maria Constantinides N.O.

Respondent

Lukas Cornelius Serfontein (Snr) N.O.

Respondent

Lukas Cornelius Serfontein (Jnr) N.O.

Respondent

Philippus Carel Prinsloo N.O.

Respondent

Gordon Mann N.O.

Respondent

Sonja Mann N.O.

Respondent

Entegra Trust (Pty) Ltd

Respondent

Bernard Katz

Respondent

Procedural Posture

Review Application / Opposed Motion for Review of Valuation and Related Declaratory Relief

Legal Issues

  1. 1 Whether the valuer exceeded his mandate by applying portfolio valuation and marketability discounts to the fair value of the applicants' shareholding.
  2. 2 Whether the settlement agreement permitted the application of discounts other than the minority discount.
  3. 3 Whether acceptance of payment by the applicants constituted a waiver or compromise of their right to review the valuation.

Ratio Decidendi

The court found that the valuer exceeded his mandate by applying portfolio valuation and marketability discounts, which were not authorized by the settlement agreement and fell outside his expertise. The settlement agreement only permitted consideration of a minority discount, and any variation required written agreement by the parties. The application of unauthorized discounts constituted a unilateral and irrational variation, resulting in an inequitable outcome for the applicants. The court held that acceptance of payment did not amount to a waiver or compromise, as there was no clear and unambiguous intention to relinquish the right to review. The valuation was reviewable and set aside...

Court Disposition

Application granted. The valuation report is reviewed and set aside to the extent it applied unauthorized discounts. Respondents ordered to pay recalculated amount and costs.

Orders

  • The First to Twenty Second Respondents, jointly and severally and in proportion to their shareholding in Numacon (Pty) Ltd, must pay the Trust R11,136,219 together with mora interest from 18 April 2023.
  • The costs of the application shall be borne by the First to Twenty Second Respondents, jointly and severally, including costs of two counsel where so employed.