Morsner v Len (167/91) [1992] ZASCA 17; 1992 (3) SA 626 (AD); [1992] 2 All SA 57 (A) (12 March 1992)

Morsner v Len (167/91) [1992] ZASCA 17; 1992 (3) SA 626 (AD); [1992] 2 All SA 57 (A) (12 March 1992)

The Supreme Court of Appeal held that the conversion of the close corporation into a company and the issuing of shares without the respondent's written consent constituted a clear breach of clause 10 of the sale agreement. The wording of clause 10 was comprehensive and intended to prevent any disposal or alteration of the purchased interest until the purchase price was paid or written consent obtained. The evidence did not establish that the respondent had given consent, either expressly or by implication, and the appellant's reliance on a telephone conversation was unconvincing. The estoppel defence was not properly pleaded or proved, and there was no causal link between any impression...

Citation
[1992] ZASCA 17
Parties
Appellant: Johann Groenewald Morsner; Respondent: Bernard Len
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
12 March 1992
Case Number
167/91
Procedural Posture
Civil Appeal / Appeal From the Transvaal Provincial Division
Outcome
Appeal dismissed with costs, including costs of two counsel. The order of the court a quo was amended and supplemented as set out in the operative orders.
Judges
Joubert, Botha, Kumleben, Van Coller, Harms
Legal Topics
Breach of Contract, Exceptio Non Adimpleti Contractus, Corporate Conversion, Contractual Interpretation
Commercial and Corporate Civil Procedure Breach of Contract Exceptio Non Adimpleti Contractus Corporate Conversion Contractual Interpretation

Case Brief

Summary, issues, holding and outcome

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Parties

Johann Groenewald Morsner

Appellant

Bernard Len

Respondent

Procedural Posture

Civil Appeal / Appeal From the Transvaal Provincial Division

Legal Issues

  1. 1 Whether the appellant's conversion of a close corporation into a company and the issuing of shares constituted a breach of clause 10 of the sale agreement.
  2. 2 Whether the respondent gave consent, expressly or impliedly, to the conversion and share issuance.
  3. 3 Whether the appellant could rely on estoppel to overcome the absence of written consent.

Ratio Decidendi

The Supreme Court of Appeal held that the conversion of the close corporation into a company and the issuing of shares without the respondent's written consent constituted a clear breach of clause 10 of the sale agreement. The wording of clause 10 was comprehensive and intended to prevent any disposal or alteration of the purchased interest until the purchase price was paid or written consent obtained. The evidence did not establish that the respondent had given consent, either expressly or by implication, and the appellant's reliance on a telephone conversation was unconvincing. The estoppel defence was not properly pleaded or proved, and there was no causal link between any impression...

Court Disposition

Appeal dismissed with costs, including costs of two counsel. The order of the court a quo was amended and supplemented as set out in the operative orders.

Orders

  • Prayer 1 is granted.
  • The defendant's counterclaim is dismissed.