Siyakhula Sonke Empowerment Corporation (Pty) Ltd and Another v Vantage Goldfields SA (Pty) Ltd (2870/2021) [2023] ZAMPMBHC 25 (9 May 2023)

IN THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION, MBOMBELA (MAIN SEAT)

CASE NUMBER: 2870/2021

In the matter between:-

SIYAKHULA SONKE EMPOWERMENT

CORPORATION (PTY) LTD

First Applicant

FLAMING SILVER TRADING 373 (PTY) LTD

Second Applicant

and

VANTAGE GOLDFIELDS SA (PTY) LTD

Respondent

JUDGMENT – LEAVE TO APPEAL

GREYLING-COETZER AJ

[1] This court found in favor of Siyakhula Sonke Empowerment Corporation (Pty) Ltd (hereinafter “SSEC”) and Flaming Silver Trading 373 (Pty) Ltd (hereinafter “Flaming Silver”) in the application against Vantage Goldfields SA (Pty) Ltd (hereinafter “Goldfields”) and ordered that:

(a) the Sale of Share Agreement entered into on 1 November 2017 and amended on 21 December 2017, lapsed on 3 January 2018, and is accordingly void and of no force and effect;

(b) the second- and third addenda to the Sale of Share Agreement, purportedly concluded on 3 May 2018 and 2 August 2018, are void ab initio and their terms are of no force and effect;

(c) Goldfields to pay R1 million to SSCE, together with interest calculated at the applicable prescribed rate as from 8 August 2018 to date of final payment; and

(d) Goldfields to pay the costs.

[2] Goldfields now apply for leave to appeal to the Full Bench of this Division, alternatively to the Supreme Court of Appeal, against the judgment and order so granted.

[3] The relevant factual matrix and arguments presented in the application was set out in the judgment and will thus not be repeated herein.

[4] Various decisions by our courts have dealt with the requirements spelled out in Section 17 of the Superior Courts Act 10 of 2013. Section 17(1) provides, in the relevant part, that:-

“(1) Leave to appeal may only be given where the judge or judges concerned are of the opinion that-

(a) (i) the appeal would have a reasonable prospect of success; or

(ii) there is some other compelling reason why the appeal should be heard, …”

[5] Therefore, Goldfields must demonstrate that the envisaged appeal would either have a reasonable prospect of success, or alternatively that there is some compelling reason why an appeal should be heard. If neither of these requirements are met, there would be no basis to grant leave to appeal.

[6] As held in Four Wheel Drive Accessory Distributors CC v Rattan N.O. 2019 (3) SA 451 (SCA), there must be a sound, rational basis for the conclusion that there are prospects of success on appeal. Thus, there ought to be more than a mere possibility of success, that the case is arguable or that the case is not hopeless.

[7] Goldfields essentially rely on three grounds of appeal which can conveniently be referred to as : -

i. Res judicata : in re parties;

ii. Res judicata : in re issues; and

iii. Finding that second and third addenda was void ab initio.

[8] Although Goldfields limited their oral argument to the finding by this court in respect of the second and third addenda, the first two grounds were set out in in the application for leave to appeal. In respect of the first it was contended that this court failed to consider the fact, as recorded in footnote 23 of the judgment by the honorable Acting Judge Roelofse (which should have read paragraph 61 of said judgment) that SSEC expressly waived its right to be joined in the 2019 application. Therefore, it was submitted another court would reasonably find that as Flaming Silver and Goldfields were parties to the 2019 application, and the requirement that the parties be the same ought to be relaxed.

[9] The issue in respect of the waiver by SSEC to be joined to the 2019 application was not dealt with in the opposing papers, nor in the heads of argument. Now in the leave to appeal it is contended that said waiver originating from paragraph [61] of the judgment by Acting Judge Roelofse which ought to have been considered. It was not an issue which was properly raise and therefor ventilated by the parties in the application leading to the judgment Goldfields seek leave to appeal against. Waiver is a question of fact which must be pleaded and the onus to establish same befalls the party seeking to rely thereon. From the judgment by Acting Judge Roelofse the waiver of SSEC was dealt with in considering whether SSEC should be joined as a party to that application (the 2019-Application). The court held that SSEC did not have a real and substantial interest of a legal nature in the main agreement or the third and fourth addendum, therefore not a necessary party to that 2019-Application.

[10] In motion proceedings it is the notice of motion and affidavits which define the issues between the parties. In Molusi and Others v Voges NO and Others[1] it was held that:

“It is trite law that in application proceedings the notice of motion and affidavits define the issues between the parties and the affidavits embody evidence. As correctly stated by the Supreme Court of Appeal in Sunker:

‘If an issue is not cognisable or derivable from these sources, there is little or no scope for reliance on it. It is a fundamental rule of fair civil proceedings that parties ... should be apprised of the case which they are required to meet; one of the manifestations of the rule is that he who [asserts]...must... formulate his case sufficiently clearly so as to indicate what he is relying on.’

[11] To mount an argument in respect of waiver at this junction, seeking the court to infer as a fact that SSCE waived any right to participate in support of issue estoppel which was also belatedly raised not only offends above principle, but does not impugn the finding that no circumstances justifying the relaxation of the requirements was placed before the court.

[12] I am therefore not persuaded that another court would find differently on the basis contended for and in respect of the relaxing of the same parties’ requirement under the prevailing circumstances.

[13] In respect of the second ground of appeal in respect of the issue of res judicata is contended that this court failed to consider the fact that in the 2019- Application, Flaming Silver sought specific performance by Goldfields of its obligation in terms of the fourth addendum to the Sale of Share Agreement, and a finding concerning the validity of the Sale of Share Agreement and addenda thereto would be essential in that regard.

[14] The fact that Flaming Silver sought specific performance in the 2019-Application was considered together with the recordal of the common cause facts, issues identified by the court for determination, issues actually determined and order granted. The issue identified and pronounced upon in the 2019-Application was the validity of the ratification of the resolution to conclude the addendum. Issue estoppel was raised in the heads of argument and absent facts, reasons, or circumstances before the court to justify the relaxation argued, I am similarly not persuaded that another court would find differently on this basis and in respect of the relaxing of the same party’s requirement under the prevailing circumstances.

[15] In respect of the declaration that the second and third addenda are void ab initio due to the lapsing of the Sale of Share Agreement on 3 January 2018, Goldfields contends that this court correctly found that the Sale of Share Agreement lapsed on 3 January 2018,[2] due to the non-fulfillment of the payment condition which stood to be fulfilled by 2 January 2018. It further contends that this court correctly found that once an agreement had lapsed due to non-fulfillment of a condition precedent, the parties are free to

conclude a new agreement with amended terms.

[16] Goldfields however contends that this court erred in finding that the second addendum was invalid and void ab initio, as there was no Sale of Share Agreement capable of being amended at the time when the second addendum was concluded and the validity of the addendum being wholly dependent upon the validity of the Sale of Share Agreement which it intended to vary and amend. Further, that the purported deemed fulfillment and waiver of the conditions precedent could and did not revive the lapsed Sale of Share Agreement.

[17] Goldfields argues that the validity of the second- and third addenda does not depend on the validity of the Sale of Share Agreement as the second- and third addenda, constitute self-standing contracts between Goldfields and Flaming Silver, which revived the Sale of Share Agreement as a new agreement.

[18] In support of this contention, it was argued that the parties in clause 3.3, read with clause 4.1 of the second addendum agreed, except for the consent condition, that all other conditions precedent were by mutual agreement deemed to have been fulfilled by no later than 31 March 2018, and that the words “deemed fulfilled” were merely used to indicate that the conditions precedent were no longer in issue. Further that the parties, per clause 3.4, varied the terms of the Sale of Share Agreement as set out in the second addendum, the payment condition having deemed to be fulfilled, and to the extent necessary, Goldfields waived compliance with the payment condition subject to Flaming Silver complying with clause 4.4 of the second addendum.

[19] It was contended that these terms ought to be considered together with clause 5.1 wherein the parties recorded that all the other terms of the principal agreement (the lapsed Sale of Share Agreement) and the first addendum shall remain in full force, and the parties remain bound thereby; clause 6.2 that the provisions of the second addendum shall prevail in the event of a conflict between its provisions and that of the principal agreement (the lapsed Sale of Shares Agreement) and clause 7.2 that the second addendum constitutes the sole agreement between the parties concerning the subject matter dealt with therein.

[20] It was argued on behalf of Goldfields that the addenda need not have expressed their intention to revive, and that no authority exists that parties cannot amend an agreement which has lapsed. Reliance was placed on the matter of Benkenstein v Neisius and Others 1997 (4) SA 835 (C) where the court held that it was in principle possible for a subsequent valid agreement to revive an earlier agreement which had

lapsed on account of the failure of a condition, provided that the conditional term in the original agreement was at the same time

varied so as to prevent the agreement from again ‘self-destructing’ on account thereof. The court in Benkenstein (supra) held that in that matter the requirement was met, as the parties had expressly agreed to remove the self-destruction clause 19.1 in a document in writing which they all signed.

[21] Goldfields also relief on the matter of Pangbourne Properties Ltd v Basinview Properties (Pty) Ltd[3] as an example and in submitting that if parties recorded a further agreement without dealing with the suspensive conditions it would not be valid. Albeit that if they record a further agreement amend the suspensive conditions it would be valid and they are not required to expressly say that they revive the lapsed agreement.

[22] In considering the aforesaid arguments it is necessary to take stock of what the terms of the agreement was, particularly in respect of the conditions precedent, as at the date just prior to conclusion of the second addendum on 3 May 2018.

[23] In respect of the conditions precedent clauses, at said time, it was required that the finance condition (clause 3.1.1 of the Sale of Shares Agreement) be met on or before 31 March 2018 (per clause 4.2 of the first addendum), the payment condition (clause 3.1.2 of the Sale of Shares Agreement) was due by 2 January 2018 and that the due date for fulfillment of the consent condition (clause 3.1.3 of the Sale of Shares Agreement) was to be met on or before 31 March 2018 (per clause 4.2 of the first addendum).

[24] Clause 3.2 of the Sale of Shares Agreement was similarly amended per Clause 4.2 of the first Addendum and at said time provide that should the Condition precedent referred to in clause 3.1.1 not be fulfilled on or before 31 March 2018, or any other Condition Precedent not having been met by the due date (being 2 January 2018 in re the payment condition and 31 march 2018 in re consent condition) thereof and the period for fulfilment thereof not be extended by the Parties in writing prior to the expiry thereof, then this agreement shall lapse and be of no force and effect. The words “this agreement” in clause 3.2 meant the Sale of Shares Agreement as amended by the First addendum.

[25] It is common cause that the payment condition was not fulfilled by 2 January 2018 and that the Sale of Shares Agreement as amended by the first addendum then lapsed on 3 January 2018.

[26] The parties then on 3 May 2018 conclude the second addendum amending the Sale of Shares agreement as amended by the first addendum in inter alia the following respect:

26.1 per clauses 3.3, 3.4, 4.1, 4.1 and 4.4 the finance- and payment conditions respectively due by 31 March 2018 and 2 January 2018 (clauses 3.1.1 and 3.1.2 of the Sale of Shares Agreement as amended by Clause 4.2 of the first addendum) were, deemed to have been fulfilled by no later than 31 March 2018; and

26.2 per clause 4.3 the due date in respect of the consent condition was again extended to 30 July 2018.

[27] Excluding the deemed fulfillment of the payment- and finance condition for the moment and which is dealt with below, it is common cause that the consent condition had not been fulfilled as by 31 March 2018, nor as at conclusion of the second addendum on 3 May 2018.

[28] Clause 5.1 and 5.2 of the second addendum provided that:

“5.1 Save as expressly set out or as necessarily implied by the context thereof all other terms of the Principal Agreement and the First Addendum shall remain in full force and effect and the Parties remain bound thereby.”

“5.2 The provisions of this Agreement shall prevail in the event of a conflict between the provisions of this Agreement and the Provisions of the Principal Agreement.”

[29] Goldfields contend that Clause 3.2 was expressly varied by the Second Addendum, this argument is unsustainable as it requires this court to ignore the altogether the language of the addendum. Clause 3.2 of the Sale of Shares Agreement as amended by the First Addendum was not amended by the Second Addendum but was incorporated as a term of the agreement on the strength of Clause 5.1. Thus, should the consent condition not be met by 31 March 2018 and most significantly that if the period for fulfillment had not been extended by the parties in writing prior to the expiry thereof, then this agreement, now meaning the Sale of Share Agreement as amended by the First Addendum and purportedly amended by the Second Addendum shall lapse and be of no force and effect.

[30] For the second addendum to have revived the lapsed Sale of Shares Agreement as amended by the first addendum it would have been required to have been concluded before 31 March 2018 as Clause 3.2 still provided that an extension of the due dates had to be agreed to before the expiry to avoid the agreement to lapse and be of force and effect.

[31] Had the second addendum extended the consent condition’s due date the position would be much different. Similarly had the parties in terms of the second addendum amended Clause 3.2 by removing the prerequisite that an extension had to be agreed on before the expiry of the due dates the agreement could lawfully have been revived as it now contends.

[32] On the basis of that held in Benkenstein (supra), in that it was in principle possible for a subsequent valid agreement to revive an earlier agreement which had lapsed on account of the failure of a condition, provided that the conditional term in the original agreement was at the same time varied so as to prevent the agreement from again ‘self-destructing’ on account thereof, the self-destruction clause had not been removed. Although the due dates for the consent condition had been amended by the second addendum, the second addendum confirmed clause 3.2 of the Sale of Shares Agreement to remain in full force and effect and that the parties are bound thereby and it did not remove the condition that an extension had to be agreed on before the expiry of the due dates otherwise the agreement would lapse and be of no force and effect. That that could be described as the self-destruction clauses were not only clauses 3.1.1 (finance condition), 3.1.2 (payment condition), 3.1.3 (consent condition) but also 3.2

[33] In Pangbourne Properties Ltd v Basinview Properties (Pty) Ltd[4] the court was faced with an agreement for the sale of land subject to suspensive conditions. Therein the contract provided inter alia:

Suspensive Conditions

….

4.1.2 the Board of Directors of both the Purchaser and the Seller approve the purchase and sale recorded herein. Proof of the passing of such resolution shall be furnished by each party to the other in the form of a written resolution duly certified by the chairman/secretary as being a true copy of a resolution, which was passed at the meeting for that purpose;

. . .

4.3 The suspensive conditions . . . have been inserted for the benefit of all parties and may

not be waived.’

Clause 4.4.2 provided that the condition relating to board approval ‘shall be fulfilled within 14 (fourteen) days of the signature date’. Clause 4.5 provided that the parties could, in writing, extend the dates of fulfilment, prior to those dates, by mutualagreement. Clause 4.6 stated that, in the absence of such extension, if the conditions were not fulfilled, then the agreement ‘shall never become of any force or effect and no party shall have any claim against any other party’ save in the event of a breach of clause 4, and that ‘the parties shall be restored to the status quo ante’.

[34] The parties in Pangbourne (supra) concluded an addendum after the agreement lapsed and Basinview contended that said agreement revived the agreement but was a new agreement on the same terms with the necessary changes being made to dates. Per the addendum the agreement (being the initial agreement) remains of full force and effect, save for that amended in the addendum. The court held that the fact that the parties agreed that the remainder of the initial agreement continued in effect, meant the terms were also included. Further that there were no shred of evidence that the addendum (usually something to be added to an agreement) was intended to replace the agreement.

[35] Basinview also argued that the addendum had to be read against the factual matrix in which the parties operated, they knew the conditions had not been fulfilled, yet they stated that the sale agreement remained of full force and effect. The court found this argument to be far-fetched. It held that the addendum was just that an alteration as provided for in the addendum, of an agreement that was assumed to be a valid contract as confirmed by the term that the agreement remained of full force and effect.

[36] In casu it was agreed to amend the Sale of Shares Agreement, by deemed some of the conditions precedent to be fulfillment and extending the due date for the remaining consent condition, stipulating that save as expressly set out in the addendum, amendment the Sale of Shares Agreement shall remain in full force and effect and the parties remain bound thereby. Therefore, it must include Clause 3.2. To contend in so agreeing it meant that clause 3.2 and more particularly the procedure how and by when and extension was required to be agreed to and what the effect would be if not so done is untenable.

[37] Goldfields contended that Clause 3.2 of the Sale of Shares Agreement is a mere recordal of the effect of non-fulfillment of the conditions precedent and was expressly varied by that agreed in the second addendum. This contention is flawed in that Clause 3.2 does not only record the effect of non-fulfillment of the conditions precedent but expressly provides what the parties were required to do to avoid the lapse of the agreement. The parties agreed that the procedure to be employed to avoid the lapse of the agreement was to effect an extension of the due date, in writing and prior to the expiry of the due date. It was thus not a mere recordal

or recital.

[38] For as far as it is contended that clause 3.2 constitutes a conflict between the Sale of Shares agreement as amended by the First Addendum and the Second Addendum and that the Second Addendum stood to prevail, it is ill-fated. The addendum did not vary the procedure to be employed to effect an extension contrary that set out in Clause 3.2 of the Sale of Shares Agreement as amended by the First Addendum. There is no competing clause in the Second Addendum to found a conflict.

[39] Based on similar reasoning, the third addendum wherein the due date for the consent condition was again extended from 30 July 2018 to 31 October 2018, and which was concluded only on 2 August 2018, would on the strength of clause 3.2, as revived by the second addendum, and purportedly revived by the third addendum, suffer the same fate in that it would have lapsed and would have been of no force and effect.

[40] It was argued on behalf of Goldfields that it did not rely on a waiver of the conditions, but a deemed fulfillment which was nothing else than a way to say it is no longer in issue. A ‘deemed fulfillment’ is just another way of waiving a condition in circumstances where it is known that waiver is impermissible. The deeming clause provided for the belated fictional fulfilment of a non-fulfilled condition precedent. By so agreeing it did not constitute a new agreement without the conditions precedent but purported to impermissibly waive the condition after the date for fulfillment and the Sale of Shares Agreement as amended by the first addendum had lapsed as held in paragraph [71] to [73] of the judgment. I am not persuaded that another court would find differently in the circumstance of the present matter.

[41] In respect of the self-standing nature of the third addendum, particularly relating to the non-refundable pre-payment of the purchase price, I am not persuaded that that found in this respect and set out in paragraphs [80] to [89] of the judgment will be dealt with differently by another court.

[42] Goldfields have failed to satisfy the requisite test for leave to appeal to be granted.

[43] The following order is made: -

1. The application for leave to appeal is dismissed, with costs.

FOR THE APPLICANTS: Adv Boonzaaier Instructed by Mouton Inc c/o Du Toit Smuts Attorneys E-mail: bm@moutoninc.co.za & tboshoff@dtsmp.co.za FOR THE RESPONDENT: Adv Stroop SC Instructed by Barnard Inc c/o A de Kock Attorneys E-mail: elloise@barnardinc.co.za & andries@barnardinc.co.z & anneline@adkattorneys.co.za

[1] 2016 (3) SA 370 (CC)

[2] Albeit that the incorrect date of 31 January 2018 is stated in the application for leave to appeal.

[3] 2011 JDR 0183 (SCA)

[4] 2011 JDR 0183 (SCA)