Tlakula and Others v Absa Bank Ltd (29037/2010) [2017] ZAGPJHC 158 (20 June 2017)

Tlakula and Others v Absa Bank Ltd (29037/2010) [2017] ZAGPJHC 158 (20 June 2017)

The court found that the agreements and the consent order were tainted by misrepresentation and the withholding of material information by the respondent and its officials. The applicants, though delayed in seeking relief, established that the foundation of the contractual relationship was flawed and contrary to public policy, as defined by constitutional values and relevant case law. The court held that the applicants' election to proceed with the transaction did not preclude rescission in light of the serious misconduct and public policy considerations. Accordingly, the suite of agreements and the consent order were declared null, void, and unenforceable.

Citation
[2017] ZAGPJHC 158
Parties
Applicant: Nkhensani Tlakula; Applicant: Musa Masebenza; Applicant: AAA Air Conditioning (Pty) Ltd; Respondent: Absa Bank Ltd
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
20 June 2017
Case Number
29037/2010
Procedural Posture
Review Application / Opposed Application for Rescission and Setting Aside of Agreements
Outcome
Application granted. The suite of agreements and the consent order are declared null, void, and unenforceable.
Judges
J.S. Nyathi
Legal Topics
Rescission of Judgment, Misrepresentation, Public Policy, Shareholders Agreement, Suretyship, Acknowledgement of Debt
Commercial and Corporate Civil Procedure Constitutional Law Rescission of Judgment Misrepresentation Public Policy Shareholders Agreement Suretyship +1 more

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Parties

Nkhensani Tlakula

Applicant

Musa Masebenza

Applicant

AAA Air Conditioning (Pty) Ltd

Applicant

Absa Bank Ltd

Respondent

Procedural Posture

Review Application / Opposed Application for Rescission and Setting Aside of Agreements

Legal Issues

  1. 1 Whether the suite of agreements concluded between the parties should be set aside due to misrepresentation and public policy considerations.
  2. 2 Whether the consent order granted in March 2011 should be rescinded under common law.
  3. 3 Whether the applicants are estopped from seeking rescission due to delay and prior election to proceed with the agreements.

Ratio Decidendi

The court found that the agreements and the consent order were tainted by misrepresentation and the withholding of material information by the respondent and its officials. The applicants, though delayed in seeking relief, established that the foundation of the contractual relationship was flawed and contrary to public policy, as defined by constitutional values and relevant case law. The court held that the applicants' election to proceed with the transaction did not preclude rescission in light of the serious misconduct and public policy considerations. Accordingly, the suite of agreements and the consent order were declared null, void, and unenforceable.

Court Disposition

Application granted. The suite of agreements and the consent order are declared null, void, and unenforceable.

Orders

  • The Shareholders Agreement dated 17 August 2005 is declared null, void, and unenforceable.
  • The Deed of Suretyship by the first applicant dated 17 August 2005 is declared null, void, and unenforceable.