Tritan Developments (Pty) Ltd and Others v MD Maluleke Leasing (Pty) Ltd and Others (51061/2007) [2008] ZAGPHC 145 (20 May 2008)

Tritan Developments (Pty) Ltd and Others v MD Maluleke Leasing (Pty) Ltd and Others (51061/2007) [2008] ZAGPHC 145 (20 May 2008)

The court held that the notice of rescission given by Tritan and Canazei on 27 August 2007 was valid and effective, even though it was given before MD Maluleke Leasing (Pty) Ltd was in mora. The payment of R500,000 was a material obligation, and a reasonable time for performance was allowed. The breach entitled the applicants to cancel the memorandum of understanding and demand transfer of shares and repayment of funds advanced. The court relied on Nel v Cloete and supporting academic commentary to confirm that a notice of rescission may be given before the debtor is in mora, provided the debtor is allowed a reasonable time to perform. Consequently, the declaratory and consequential...

Citation
[2008] ZAGPHC 145
Parties
Applicant: Tritan Developments (Pty) Ltd; Applicant: Canazei Holdings (Pty) Ltd; Applicant: Leon M de Lange; Respondent: MD Maluleke Leasing (Pty) Ltd; Respondent: Phillip Steyn; Respondent: TUM Investments (Pty) Ltd; Respondent: Yvanne Morne Coertze; Respondent: Daniel Mathambo Maluleke; Respondent: Johan Dawid Nieman; Applicant: WH Pretorius; Respondent: Registrar of Companies; Respondent: Nedbank Limited
Court
High Courts - Gauteng
Jurisdiction
South Africa
Judgment Date
20 May 2008
Case Number
51061/2007
Procedural Posture
Civil Application / Judgment After Hearing of Consolidated Applications
Outcome
The cancellation application is granted; the memorandum of understanding is declared cancelled due to breach. The respondents are ordered to transfer shares and pay costs. The liquidation application is dismissed. Costs of the urgent application follow the result.
Judges
B.R. Southwood
Legal Topics
Contract Cancellation, Notice of Rescission, Specific Performance, Share Transfer, Liquidation Application
Commercial and Corporate Civil Procedure Contract Cancellation Notice of Rescission Specific Performance Share Transfer Liquidation Application

Case Brief

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Parties

Tritan Developments (Pty) Ltd

Applicant

Canazei Holdings (Pty) Ltd

Applicant

Leon M de Lange

Applicant

MD Maluleke Leasing (Pty) Ltd

Respondent

Phillip Steyn

Respondent

TUM Investments (Pty) Ltd

Respondent

Yvanne Morne Coertze

Respondent

Daniel Mathambo Maluleke

Respondent

Johan Dawid Nieman

Respondent

WH Pretorius

Applicant

Registrar of Companies

Respondent

Nedbank Limited

Respondent

Procedural Posture

Civil Application / Judgment After Hearing of Consolidated Applications

Legal Issues

  1. 1 Whether a party to a contract without an express or tacit lex commissoria may acquire a right to cancel by giving notice of rescission before the other party is in mora.
  2. 2 Whether the memorandum of understanding was validly cancelled due to breach by MD Maluleke Leasing (Pty) Ltd.
  3. 3 Whether the applicants are entitled to transfer of shares and repayment of advanced funds.

Ratio Decidendi

The court held that the notice of rescission given by Tritan and Canazei on 27 August 2007 was valid and effective, even though it was given before MD Maluleke Leasing (Pty) Ltd was in mora. The payment of R500,000 was a material obligation, and a reasonable time for performance was allowed. The breach entitled the applicants to cancel the memorandum of understanding and demand transfer of shares and repayment of funds advanced. The court relied on Nel v Cloete and supporting academic commentary to confirm that a notice of rescission may be given before the debtor is in mora, provided the debtor is allowed a reasonable time to perform. Consequently, the declaratory and consequential...

Court Disposition

The cancellation application is granted; the memorandum of understanding is declared cancelled due to breach. The respondents are ordered to transfer shares and pay costs. The liquidation application is dismissed. Costs of the urgent application follow the result.

Orders

  • It is declared that the memorandum of understanding signed on 13 August 2007 has been duly cancelled by the first applicant consequent upon the breach by the first respondent.
  • The first respondent is ordered to transfer all shares held in the second applicant (25% of shareholding) to the first applicant against payment of R5,102,454.10.