Living Waters (Pty) Ltd v Tharisa Minerals (Pty) Ltd (4004/2020) [2020] ZAGPPHC 604 (7 October 2020)

Living Waters (Pty) Ltd v Tharisa Minerals (Pty) Ltd (4004/2020) [2020] ZAGPPHC 604 (7 October 2020)

The court found that the written agreement and Terms of Reference (TOR) between the parties prescribe a sales comparison approach for valuing the applicant's properties, with specific factors to be considered. The language of the MOA and TOR is clear and unambiguous, listing individual erven and requiring valuation as separate properties, not as a single township development. The TOR explicitly excludes attributing value to any business carried-on on the property, thereby excluding the DCF model, which is premised on future business income and discounting over time. The court rejected the respondent's argument that the applicant's ownership structure necessitated the DCF method, finding...

Citation
[2020] ZAGPPHC 604
Parties
Applicant: Living Waters (Pty) Ltd; Respondent: Tharisa Minerals (Pty) Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
7 October 2020
Case Number
4004/2020
Procedural Posture
Declaratory Application / Judgment
Outcome
Application granted in favour of the applicant. Declaratory relief issued excluding the DCF model from valuation. Costs awarded to the applicant.
Judges
E van der Schyff
Legal Topics
Contract Interpretation, Property Valuation, Discounted Cash Flow Exclusion, Sales Comparison Approach
Commercial and Corporate Land and Property Contract Interpretation Property Valuation Discounted Cash Flow Exclusion Sales Comparison Approach

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 10 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Living Waters (Pty) Ltd

Applicant

Tharisa Minerals (Pty) Ltd

Respondent

Procedural Posture

Declaratory Application / Judgment

Legal Issues

  1. 1 Whether the Discounted Cash Flow (DCF) valuation model is excluded by the written agreement and Terms of Reference between the parties.
  2. 2 Whether the purchase price of the applicant's erven should be determined without application of the DCF model.
  3. 3 Whether the court should interfere with the agreed valuation procedure before it has run its course.

Ratio Decidendi

The court found that the written agreement and Terms of Reference (TOR) between the parties prescribe a sales comparison approach for valuing the applicant's properties, with specific factors to be considered. The language of the MOA and TOR is clear and unambiguous, listing individual erven and requiring valuation as separate properties, not as a single township development. The TOR explicitly excludes attributing value to any business carried-on on the property, thereby excluding the DCF model, which is premised on future business income and discounting over time. The court rejected the respondent's argument that the applicant's ownership structure necessitated the DCF method, finding...

Court Disposition

Application granted in favour of the applicant. Declaratory relief issued excluding the DCF model from valuation. Costs awarded to the applicant.

Orders

  • It is declared that the purchase price of all the erven owned by the applicant in Buffelspoort Ext.2, Rustenburg is to be determined, upon a proper interpretation of the written agreement and Terms of Reference, without application of the Discounted Cash Flow valuation model.
  • The respondent is to pay the costs of the application, including the costs of senior counsel.