4.
We understand that you wish to utilize the shares in Sigma Logistic Solutions (Pty) Ltd as collateral in raising funds to settle the
unpaid balance of R3.5 million referred to above, and we confirm that we will be prepared to release these shares from the pledge, provided that we receive suitable guarantees for
payment of the R3.5 million balance.’ (The italics are mine.)
[17]
In their letter of 18 July 2006 the eleventh respondent’s attorneys referred to the paragraphs
of the appellant’s attorney’s letter of 8 March 2006 which I have quoted. They then stated that as the amount due under
the Moolman-Sigma agreement had been paid to it, the appellant, by refusing to release the Sigma shares in question unless suitable
guarantees for payment of the R3.5 million balance under the USA agreement were furnished (something to which it was not entitled
under the Moolman-Sigma agreement), had breached clause 5 of the Moolman-Sigma agreement and was accordingly not entitled to claim
the outstanding balance due under the USA agreement. In this regard the eleventh respondent’s attorneys pointed out that the
appellant’s failure to release the shares had rendered it impossible for the eleventh respondent at that stage to raise the
capital required to pay the outstanding balance of R3.5 million.
[18]
Referring to the appellant’s attorneys’ letter demanding payment by the first appellant of
the full amounts due under the Standard Bank cession and the loan agreement, the attorneys stated that they, as they put it, placed
it pertinently on record that the amounts outstanding under the cession and the loan agreement were not owing because of the Moolman-Sigma
and the USA agreements. If these two agreements could not be carried out, they continued, it was possible that what they called the
over-arching (oorkoepelende) debt under the cession and the loan agreement would be of application. In the present case, they said,
it did not apply and they enquired how what they called this ‘dead point’ could be sorted out with the appellant.
[19]
In dealing with the eleventh respondent’s attorneys’ letter Mr Lightfoot said that it did
‘not affect the entitlement to relief sought in this application’. In support of this contention he said the following:
’57.1
The USA Agreement provides for an amount of R4 million to be paid, whereafter the parties would go their
separate ways. It is common cause that only R2 million was paid. The full amount has not been paid as alleged in the letter. Accordingly
the Applicant was entitled to, and cancelled the USA Agreement;
57.2
Both the [Moolman-Sigma] Agreement and the USA Agreement contain . . . non-variation clauses. Any variation
has to be in writing and signed by the parties, otherwise it would have no effect;
57.3
The letter that I directed on 8 March 2006 . . . makes it clear that the Sigma shares would be released,
provided that a suitable guarantee for R3 million be received by the Applicant. This did not happen;
57.4
My letters of 8 March 2006 and 13 April 2006 . . . clearly reflect that, if payment of R3,5 million is
not made to the Applicant, both the sale of shares agreements would be cancelled;
57.5
At no point in time was a demand made for the release of the Sigma shares. If the Eleventh Respondent
contends that the R2 million was paid [in terms] of the Sigma Agreement, one would have expected the Eleventh Respondent to have
informed the Applicant that the payment was for such purpose, and to have demanded the release of the shares soon thereafter. This
did not happen;
57.6
It appears from my letter of 13 April 2006 . . . that the Eleventh Respondent accepted its terms and
conditions, which were inter alia the applicant would retain all securities until payment of R3,5 million, whereafter it would be cancelled and returned;
57.7
The Eleventh Respondent at no time indicated, that without the Sigma shares being released to it, the
Eleventh Respondent would not be able to raise the funds;
57.8
The letter . . . in fact reflects an admission of the liability for the full amount, but seems to reflect
a contention that the sale of shares agreements are still operative. It follows that, due to the cancellation of those agreements,
the full amount of the liability on strength of the ceded claims and loan facility, [is] owing;
57.9
On any construction, it is submitted that R3,5 million is due and payable;
57.10
The letter does not raise any dispute as to the entitlement to the relief sought.’
OPPOSING AFFIDAVIT FILED ON BEHALF OF RESPONDENTS
[20]
In his opposing affidavit filed on behalf of all fourteen respondents the eleventh respondent denied
that any amounts had been advanced to the first respondent under the loan agreement. He also denied the total amount owing by the
first respondent to the Standard Bank of South Africa Ltd on 19 April 2004. In this regard he stated that the bank had charged interest
at a rate above the rate agreed. He also said that, after the cession, the appellant had charged interest above the agreed rate,
had wrongly charged two so-called ‘success fees’ of R603 253 and R375 250 and had further charged interest on these fees.
He further alleged that the appellant had, totally contrary to the agreement, charged VAT at 14% on the interest which it had debited,
which rendered the effective interest levied excessive. The appellant, he said, would thus have to reconcile what he called the whole
transaction history (‘die gehele transaksie geskiedenis’).
[21]
He explained that it was for this reason that the appellant was prepared to accept R7 million for the
full liability for the outstanding indebtedness towards itself. Settlement discussions took place between the respondents’
attorneys and those acting for the appellant. They took place in about June 2005 and were held with the purpose of replacing and
settling the total liability of the first respondent (and also of all the other respondents which stood surety for the debts of the
first respondent and provided security therefor) and also in order to determine methods for the final disposal and payment of all
amounts.
[22]
Thereafter, said the eleventh respondent, discussions took place between Mr Lightfoot and himself and
eventually, in July 2005 and at Pretoria, they orally settled the matter on the following basis and terms:
(a)
the appellant was to receive an amount of R7 million in full and final settlement of all its claims
against the first respondent and the other respondents;
(b)
the settlement would be implemented by means of the conclusion of three agreements, viz (i) an agreement
for the sale, to one WC Swanepoel, of Sigma shares for R1.5 million, payable to the appellant (what I shall call the Swanepoel-Sigma
agreement); (ii) an agreement for the sale, to eleventh respondent, of Sigma shares for R1.5 million, payable to the appellant (what
I have, in summarising Mr Lightfoot’s affidavit, called ‘the Moolman-Sigma agreement’) and (iii) an agreement for
the sale to the eleventh respondent of shares in the tenth respondent and Logtek USA Inc for R4 million, payable to the appellant
(what I have, in summarising Mr Lightfoot’s affidavit, called ‘the USA agreement’).
[23]
The purpose of these three agreements, said the eleventh respondent, was to put in place a practical
mechanism to pay the R7 million and to carry out the terms of the settlement agreement, to which all the respondents were parties.
The eleventh respondent also said that it was part of the settlement that, on payment to the appellant of the two amounts of R1.5
million under the two Sigma agreements, the shares sold would be immediately released from the pledge to which they were subject.
As far as the eleventh respondent was concerned, this was in order to enable him to utilise his shares to provide security to a financial
institution so that he could raise the necessary funds to pay the R4 million under the USA agreement. The provision that the appellant
was to release the Sigma shares was, he said, a material provision and a reciprocal term of the settlement. Both he and Mr Lightfoot
were thoroughly aware of the fact and agreed that the remaining R4 million due under the settlement would have to be paid by using
the Sigma shares in order to get the necessary funding.
[24]
The eleventh respondent also said that the intention of the settlement between Mr Lightfoot and himself
was that it and the resulting three agreements would constitute a novation of the rights the appellant had received under the cession
and the loan agreement. He explained further that the actual intention of himself and the appellant’s representative was that
there would be only one final settlement agreement, in terms of which R7 million would be paid to the appellant in order to discharge
the whole debt. He submitted that, if the appellant were to contend that there was not one agreement but three separate agreements,
it should be estopped from relying on the precise literal interpretation of the three agreements. Alternatively, he said, he and
the respondents concerned were entitled to have the agreements rectified so that they were in accordance with the oral settlement
agreement.
[25]
The eleventh respondent stated both he and Mr Swanepoel had paid the amounts due under the Sigma agreements
and he had in addition paid R500,000 in respect of the USA contract. Mr Swanepoel had received his shares under the Swanepoel-Sigma
agreement but he (the eleventh respondent) had not.
[26]
He annexed to his affidavit a letter which he sent to Mr Lightfoot on 20 February 2006. This letter contains
the following:
‘1)
With regard to the two payments, totalling R2 million, made by myself towards the [Moolman-Sigma
and USA] transactions, I wish to confirm that the Sigma transaction is now paid in full, being R1.5 million. The balance of R500
000 was paid towards the [USA] transaction and the balance owing on this transaction is currently R3.5 million as per our agreement
last year.
2)
I therefore respectfully request the return of the original Sigma share certificates and signed
transfer documentation to conclude the Sigma transaction.
3)
I require the certificates and transfer documentation as a matter of urgency to enable me to
raise the final capital in my own name to effect the final R3.5 million payment to you.’
[27]
The appellant’s demand in paragraph 4 of its letter of 8 March 2006 (which was written in answer
to his letter of 20 February 2006) that he provide extra security for payment of the R3.5 million before the Sigma shares were released
was, he said, completely in conflict both with the settlement agreement and the terms of the three written agreements. The appellant,
he contended, by refusing to release his Sigma shares was in mora in respect of its obligations under the agreement. It was accordingly unable to demand payment of the balance due in respect of the
USA agreement.
[28]
The eleventh respondent contended that the appellant was in the circumstances not entitled to cancel
the Moolman-Sigma and the USA agreements. As regards the Moolman-Sigma agreement, this was because he had paid the R1.5 million due
in respect of the shares and, as regards the USA agreement, because the R3.5 million, the balance outstanding under the agreement,
could for the reasons stated above not be demanded until the appellant had complied with its obligation to release his Sigma shares.
[29]
He also contended that, in any event, even if the two agreements were validly cancelled, this would not
revive the old indebtedness in terms of the loan agreement and the indebtedness which formed the subject matter of the cession by
the Standard Bank of South Africa Ltd.
APPELLANT’S REPLYING AFFIDAVIT
[30]
In a replying affidavit deposed to by Mr Lightfoot, which was filed on behalf of the appellant, it is
contended that the appellant is entitled to judgment against the respondent in the amount of R3.5 million, namely the amount outstanding
under the USA agreement, in which amount - Mr Lightfoot said - the respondents admitted they were indebted to the appellant but which
they alleged was not due because of the appellant’s failure to release the Sigma shares. Mr Lightfoot further argued that the
respondents could not rely on the settlement alleged by the eleventh respondent because of non-variation clauses contained in the
loan agreement and the agreements between the respondents and the Standard Bank of South Africa Ltd which allegedly gave rise to
the rights ceded to the appellant. Furthermore, so Mr Lightfoot contended, the eleventh respondent, by signing the letter of 13 April
2006, to which I referred in para [11] above, ‘accepted the terms and conditions contained in [that letter], which [included]
that only upon payment of R3.5 million together with interest would all pledges, sureties, covering bonds and cessions be cancelled
and returned. Also a term of [the letter] is that a CM42 document in respect of the Sigma shares was to be signed. This flies in
the face of the allegation that payment had been made: the R2 million had been paid by 3 December 2005, [the eleventh respondent]
had directed the letter of 20 February 2006 . . ., yet on 13 April 2006 [he] signed [the letter in question] with this condition
stipulated therein.’ Mr Lightfoot also stated that the eleventh respondent had signed the relevant CM42 document.
[31]
Mr Lightfoot stated that the respondents never demanded the release of the Sigma shares, with the result
that ‘[e]ven if payment had been made of R1.5 million, as is alleged by [the eleventh respondent], the [appellant] has not
been placed in mora
