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FLYNOTES: CONTRACT – Suspensive condition – Sale of shares – Subject to fulfilment of conditions precedent – Consent condition not fulfilled on due date – Agreement would have come to an end and be of no force and effect when consent condition was not fulfilled – Addendum "self-destructed" – Principal agreement became unenforceable – Requirements for revival of contract considered – Non-fulfilment of suspensive condition – Automatic lapsing of contract – Appeal dismissed.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

 

Reportable

Case no: 853/2023

 

In the matter between:

VANTAGE GOLDFIELDS SA (PTY) LTD                                                         APPELLANT

 

and

 

SIYAKHULA SONKE

EMPOWERMENT CORPORATION (PTY) LTD                               FIRST RESPONDENT

 

FLAMING SILVER TRADING 373 (PTY) LTD                            SECOND RESPONDENT

 

Neutral citation:    Vantage Goldfields SA (Pty) Ltd v Siyakhula Sonke Empowerment Corporation (Pty) Ltd and Another (853/2023) [2025] ZASCA 01 (9 January 2025)

Coram:        ZONDI DP and NICHOLLS and MEYER JJA and COPPIN and BLOEM AJJA

Heard:          14 November 2024

Delivered:    This judgment was handed down electronically by circulation to the parties’ representatives by email, publication on the Supreme Court of Appeal website, and released to SAFLII. The date for hand down is deemed to be 9 January 2025 at 11h00.

Summary:    Contract – sale of shares – suspensive conditions – non-fulfilment – automatic lapsing of contract – requirements for revival of contract.

 

ORDER

On appeal from: Mpumalanga Division of the High Court, Mbombela (Greyling-Coetzer AJ, sitting as court of first instance):

The appeal is dismissed with costs.

 

JUDGMENT

Coppin AJA (Zondi DP, Nicholls and Meyer JJA and Bloem AJA concurring):

[1]      On 19 October 2022, the High Court, Mpumalanga Division, Mbombela (the high court) declared that a sale of shares agreement (the principal agreement) between the appellant, Vantage Goldfields SA (Pty) Ltd (Goldfields) and the second respondent, Flaming Silver Trading 373 (Pty) Ltd (Flaming Silver), was not revived and to be ‘void and of no force and effect’ due to the non-fulfilment of certain of its suspensive conditions. The high court also ordered Goldfields to repay an amount of R1 million paid to it by the first respondent, Siyakhula Sonke Empowerment Corporation (Pty) Ltd (Siyakhula), in terms of an addendum to the principal agreement, including the costs of the application. This is an appeal against the whole of that order with the necessary leave having been granted by this Court.

 

[2]      The background facts are common cause. The only issue is whether the principal agreement, which otherwise would have lapsed due to the non-fulfilment of certain suspensive conditions, was revived by subsequent addenda to that agreement. Goldfields contends that it was revived. Flaming Silver maintains that it was not.

 

The principal agreement

[3]      On 1 November 2017, Goldfields and Flaming Silver concluded a written sale of shares agreement (the principal agreement) in terms of which the shareholding of Goldfields in two of its subsidiary companies, and Goldfields’ claims in those companies and another, was purchased by Flaming Silver for R310 million. Clause 3.1 of the principal agreement provided that it was subject to the fulfilment of the ‘conditions precedent’ set out in subclauses 3.1.1, 3.1.2 and 3.1.3.

 

[4]      These conditions, which are referred to in the principal agreement as ‘Conditions Precedent’, were the following. In terms of clause 3.1.1, Flaming Silver was to procure financing in respect of the full amount of the purchase price (R310 million) from reputable and verifiable sources on or before 31 January 2018, or a such later date as agreed to by the parties in writing prior to that deadline (the financing condition). In terms of clause 3.1.2, Flaming Silver was to pay an amount of R10 million plus R1.00 (of the purchase price) into the trust account of attorneys Martins Weir-Smith Inc pending the fulfilment of the conditions precedent by the due date stipulated in clause 6.1 of the principal agreement. Clause 6.1 stipulated that this payment was to be made within 60 days of the ‘effective date’, which, in turn is defined as the date of the signature of the principal agreement, being 1 November 2017 (the payment condition). And in terms of clause 3.1.3, all the necessary regulatory and statutory approvals, including the consent of the Minister for the change in the control of the subsidiary companies, as envisaged in s 11 of the Mineral and Petroleum Resources Development Act 28 of 2002 (the MPRDA), had to be obtained by no later than 31 January 2018, or ‘as otherwise agreed to by the parties’ (the consent condition).

 

[5]      Clause 3.2 of the principal agreement specifically provided:

‘Should the Condition Precedent referred to in clause 3.1.1 not be fulfilled on or before 31 January 2018 or any other Condition Precedent not having been met by the due date 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.’

 

[6]      In clause 12 of the principal agreement the parties agreed specifically, inter alia, on aspects such as representations (clause 12.2), the variation and amendment of its terms (clause 12.3), jurisdiction (clause 12.8) and other aspects. The parties also agreed that no variation, or consensual cancellation of the principal agreement was of any force and effect unless it was in writing and signed by the parties ‘in person’. The terms of the principal agreement shall only be referred to as far as they are relevant and necessary to the issues in this matter.

 

The first addendum

[7]      On 21 December 2017, Flaming Silver and Goldfields concluded a written first addendum to the principal agreement, which dealt with the aspect of the fulfilment of the ‘conditions precedent’, among other matters (the first addendum). The first addendum also addressed ‘Interim Engagements’ (clause 3). According to clause 5.2 of the first addendum, clause 12 of the principal agreement was incorporated into it. Additionally, clause 4 of the first addendum, which specifically dealt with the conditions, reads as follows:

‘4 UPDATES ON CONDITIONS PRECEDENT

4.1       The Parties record the following agreements in respect of the Conditions Precedent herein mentioned as at the Execution Date as set out in this clause 3 of this Addendum. The remaining Conditions Precedent are unaffected.

4.2       Ad clauses 3.1.1, 3.1.3 and 3.2        By amending the date “31 January 2018” and substituting [it] with “31 March 2018” in all relevant places.’

 

[8]      In clause 5.1 of the first addendum, the parties agreed specifically that the remainder of the terms of the principal agreement, which are not dealt with in the addendum, were still of ‘full force and effect’. The clause reads as follows:

‘Subject to the terms of this Addendum, the further terms of the Principal Agreement remain of full force and effect and are not amended by the terms of this Addendum.’

 

[9]      Thus, in terms of the first addendum concluded on 21 December 2017, only the original deadlines for the fulfilment of the financing and consent conditions (clauses 3.1.1 and 3.1.3) in the principal agreement was changed from ‘31 January 2018’ to ‘31 March 2018’. But significantly, the date for the payment condition (clause 3.1.2) was not dealt with and remained unaffected (clause 4.1). Like the other terms of the principal agreement that were not dealt with in the first addendum, the payment condition remained in ‘full force and effect’ and was ‘not amended’ by the terms of the first addendum (clause 5.1).

 

[10]    Certain payments were made in respect of the purchase price, namely: R2 127 000 on 29 March 2018, and R5 873 000 and R2 000 000 on 31 March 2018, totalling R10 million, into the account of attorneys Martins Weir-Smith Inc, purportedly as contemplated in clause 6 of the principal agreement.

The second addendum

[11]    On 3 May 2018, after the expiry of the extended fulfilment date set in the first addendum, Goldfields and Flaming Silver entered into the second addendum to the principal agreement (the second addendum). The purpose of this addendum is recorded in clause 3, as follows:

‘3  Introduction

3.1    On or about 1 November 2017, the Parties entered into the Principal Agreement in terms of which the Purchaser purchased the Sale Shares and the Sale Claims from the Seller.

3.2    In terms of the Principal Agreement, the Conditions Precedent were to be fulfilled by 31 January 2018. The Parties extended the fulfilment date to 31 March 2018, by amending the Principal Agreement through the First Addendum.

3.3    Subject to the terms set out in this Addendum, the Parties have reached agreement that except for the Condition precedent referred to in clause 3.1.3 of the principal Agreement, (“the Remaining Condition Precedent”), all the other Conditions precedent are by mutual agreement, deemed to have been fulfilled by no later than 31 March 2018.

3.4    The Parties now wish to vary the Principal Agreement as set out herein.’

 

[12]    Clause 3.1.3 of the principal agreement contains the consent condition. That condition covers all regulatory approvals that had to be obtained, including the approval of the Minister in terms of s 11 of the MPRDA. In clause 4.3 of the second addendum, the following is recorded as having been agreed in that regard:

‘That the Seller will, with the assistance of the Purchaser, immediately submit the application for the Section 11 transfer as required by the MPRDA to execute the transaction. The Seller undertakes to provide the Purchaser with regular updates in respect of the progress of the Section 11 application with the view to completing the same by no later than 30 July 2018 or such later date agreed in writing between the Parties.’

 

[13]    In clause 4.2 of the second addendum the payment condition is dealt with. The following is recorded as having been agreed in that regard:

‘The condition set out in clause 6.1 of the Principal Agreement shall be deemed to have been fulfilled by the due date for compliance thereof and to the extent required, the Seller waives compliance with said clause 6.1 by the date 60 (sixty) calendar days from the Effective date subject to the Purchaser complying with clause 4.4 of this Addendum.’

 

 

[14]    In clause 4.4 the following is recorded as agreed:

‘That the purchase price currently held in the Trust Account of Martins Weir-Smith Attorneys will be paid to the Seller upon successful completion of the Section 11 transfer and any other regulatory approvals that may be required in terms of the Principal Agreement, as determined by the Parties.’

 

[15]    In the second addendum the parties thereto confirmed, inter alia, that the terms of the principal agreement that were not varied in the second addendum would remain in full force and effect (clause 5.1); that the provisions of that document prevail in the event of a conflict between its provisions and those of the principal agreement (clause 5.2); and that no addition to, variation or waiver of any right under the second addendum would be of any force or effect unless recorded in writing and signed in manuscript by the parties thereto (clause 7.3).

 

The third addendum

[16]    On 2 August 2018, Goldfields, Flaming Silver and Siyakhula concluded the ‘Third Addendum’ to the principal agreement. In that document they are described as ‘the parties’, but more particularly, Goldfields is described as the ‘Seller’, Flaming Silver as ‘the Purchaser’, and Siyakhula (referred to therein as ‘SSC’) is described as intervening ‘in specific matters’. As was the style in the previous addenda, in clause 3 of the third addendum the parties thereto recorded its purpose. The clause reads as follows:

‘3. Introduction

3.1    On or about 1 November 2017, the Parties entered into the Principal Agreement in terms of which the Purchaser purchased the Sale Shares and the Sale Claims from the Seller.

3.2    In terms of the Principal Agreement, the Conditions Precedent were to be fulfilled by 31 January 2018. The parties extended the fulfilment date to 31 March 2018, by amending the Principal Agreement through the First Addendum.

3.3    On or about 3 May 2018, the Parties, through the Second Addendum, reached agreement that, except for the Condition Precedent referred to in clause 3.1.3 of the Principal agreement, all other conditions precedent were by mutual agreement deemed to have been fulfilled by no later than 31 March 2018, and further extended the date for fulfilment of such condition precedent to 30 July 2018.

3.4    The Parties and SSC in specific circumstances now wish to vary The Principal agreement as set out herein.’

[17]    In clause 4.1 of the third addendum the deadline for fulfilment of the consent condition was (purportedly) varied from ‘30 July 2018’ to ‘31 October 2018’. The subclause reads as follows:

‘The date set out in clause 4.3 of the Second addendum is amended from “30 July 2018” to “31 October 2018’’ or such later date as agreed in writing between the Parties.’

 

[18]    In terms of clause 4.2 it was agreed that Goldfields would, with the consent of Flaming Silver, instruct Martins Weir-Smith Inc to repay to Flaming Silver the moneys deposited into their account pursuant to clause 6 of the principal agreement (ie the R10 million). And that from the date of the signature of the third addendum (ie 2 August 2018) clause 6 of the principal agreement would be deemed to have been deleted from that agreement. In clause 4.3, Flaming Silver undertook to use a portion of those moneys once received (and subject to written proof that the section 11 application had been submitted as agreed in the third addendum) as follows. By the payment of R1.1 million on 3 August 2018 to Goldfields for the purpose of procuring post-commencement funding and by the payment of R1 million to Goldfields on 3 August 2018 (or such later date as agreed in writing by the parties) as ‘a non-refundable pre-payment of the purchase price and not subject to any conditions precedent, save for delivery of the section 11 application as set out earlier in the third addendum. It was agreed that this latter amount was to be set-off against the balance of the purchase price on the ‘Completion Date’, which is defined in the principal agreement as ‘the date at which all Conditions precedent have been met’ (clause 1.2.2).

 

[19]    It was agreed that Siyakhula would pay an amount of R1.1 million a month for three months to Goldfields as part of the post-commencement funding (clause 4.4). Flaming Silver agreed to submit the section 11 application on 2 August 2018 and provide Goldfields with written proof of the submission (clause 4.5). Additionally, it was agreed that prior to the transfer of the subject matter of the sale, but after proof that the Minister’s consent in terms of section 11 of the MPRDA had been obtained, Flaming Silver was to pay the balance of the purchase price (ie R9 000 001.00) to Goldfields. Further, the parties agreed on the usual terms, such as no variation and waiver except in writing, and confirmed that ‘[s]ave as expressly set out or as necessarily implied’ by the context of the third addendum, ‘all other terms of the Principal Agreement, the First addendum and the Second Addendum shall remain in full force and effect and the parties remain bound thereby’ (clause 5.1).

 

The fourth addendum and the High Court order in case 858/2019

[20]    A fourth addendum was purportedly entered into by Goldfields, Flaming Silver and Siyakhula on 31 October 2018. That addendum purported to be an agreement, inter alia, that all the conditions, including the consent condition, had been fulfilled, even though it also recorded that the necessary consent of the Minister, as is required in terms of section 11 of the MPRDA, had not been obtained by that date, ie by 31 October 2018, when the fourth addendum was concluded. But of importance, the parties never changed (or purported) to change the date for the fulfilment of the consent condition any further. The fourth addendum further purported to be a document in which all outstanding issues were finalised. For example, the parties agreed that Flaming Silver ‘shall forthwith transfer the balance of the purchase price’ to the trust account of Goldfields’ attorneys.

 

[21]    In an application brought in the high court under case number 858/2019, Flaming Silver sought an order of specific performance against Goldfields for the performance of its obligations in terms of the fourth addendum. Goldfields opposed the application, contending that Flaming Silver was not entitled to such an order. A former director of Flaming Silver, Mr Dippenaar, intervened and brought a counter application in which he sought the setting aside of a resolution of Flaming Silver dated 12 November 2017, purportedly to rectify the signing of the fourth addendum. He also sought an order that the ratification of the addendum be declared null and void. On 17 July 2019, in a written judgment, the high court (per Roelofse AJ) found that the conclusion of the fourth addendum was not properly authorised and that the purported ratification by Flaming Silver of the conclusion of the fourth addendum was null and void. The court accordingly dismissed the application brought by Flaming Silver. Flaming Silver has not appealed against that order of the high court and has accepted that outcome.

 

[22]    In the present application, Siyakhula and Flaming Silver successfully sought orders in the high court declaring that: (a) the principal agreement had lapsed on 31 January 2018, alternatively 1 April 2018, further alternatively on 31 July 2018, and was accordingly void and of no force and effect; and (b) that the second and third addenda were of no force and effect or are void and unenforceable. They also successfully sought an order relying on an enrichment remedy that Goldfields repay to Siyakhula, alternatively to Flaming Silver, the amount of R1 million, plus interest at the rate of 10% from 8 August 2018 to date of payment.

 

[23]    The high court found that the principal agreement lapsed on 3 January 2018, because of the non-fulfilment of the payment condition. It found that the payment condition had to be fulfilled before 2 January 2018. It concluded that the principal agreement was of no force and effect and that the subsequent addenda were all ‘void ab initio’. It nevertheless went on to consider each of the addenda. It concluded that even if the payment condition may have been fulfilled on 31 March 2018, the consent condition had remained unfulfilled. Further, that when the second addendum was concluded on 3 May 2018, the principal agreement had lapsed and was not revived.

 

[24]    Having found that the second and third addenda suffered from the same malady, the high court went on to reject the contention that clause 4.3 of the third addendum, in terms of which Flaming Silver agreed to pay Goldfields the amount of R1 million as a non-refundable pre-payment of part of the purchase price, was ‘a self-standing obligation’. It held that the clause was ‘inextricably linked’ to Flaming Silver’s obligation in terms of the principal agreement to pay for what had been purchased (ie the shares and claims), and that without the principal agreement, Flaming Silver was not entitled to the shares and claims and therefore not obliged to pay the purchase price. The fact that the parties agreed in clause 4.3.2 that the payment of the R1 million was ‘non-refundable’ did not, in those circumstances, justify Goldfields’ retention of that amount.

 

The arguments before this Court

[25]    Essentially Goldfields submits the following. Parties to an agreement, that lapsed due to the non-fulfilment of a suspensive condition, may revive the lapsed agreement if the relevant conditional term in the original agreement is amended to prevent the agreement from ‘self-destructing’ on account of the non-fulfilment of that same condition. And that the consensus of the parties, as expressed in the second and third addenda, revived the principal agreement by incorporating terms that protected the revived contract from ‘self- destruction’. For this argument Goldfields relies on what was held in McPherson v Khanyise Capital (Pty) Ltd and Others (McPherson);[1] Abrinah 7804 (Pty) Ltd v Kapa Koni Investments CC (Abrinah);[2] Benkenstein v Neisius and Others (Benkenstein);[3] Cronje v Tuckers Land and Development Corporation (Pty) Ltd  (Cronje);[4] and Fairoaks Investment Holdings (Pty) Ltd and Another v Oliver and Others (Fairoaks).[5] The locus classicus on the topic is the decision in Cronje.

 

[26]    In Abrinah, where the court relied on Cronje, McPherson and other decisions, the legal position regarding the revival of lapsed contracts is usefully summarised as follows:

‘In McPherson it was also held that the lapsed agreement could not simply be revived. A new agreement would in effect have to be concluded. It was held that the parties could conclude such a new agreement on the same conditions as those contained in the lapsed agreement or by incorporating those terms, but then they would have to eliminate or amend the condition (especially the cutoff date, which would already have passed by then) that had led to the lapsing of the initial contract; otherwise the new agreement would simply immediately self-destruct due to the non-fulfilment of the suspensive condition. It was also held that, where the contract is by law required to be in writing, an oral agreement to eliminate or to amend a material clause of the lapsed agreement would not be possible. It would have to be in writing and signed by both parties.

In [Cronje] it was also held that the revival of the whole of a lapsed agreement would necessarily include the revival of the suspensive condition in it that had caused the agreement to lapse and, because the period stipulated in that condition would already have expired, the revived contract would immediately terminate or “self-destruct”.’[6]

 

[27]      In Benkenstein the court there held, inter alia, the following:

‘…Cronje’s case supra does not exclude the possibility of a subsequent valid agreement reviving an agreement which has lapsed on account of the failure of a condition. In my view, no reasons for such exclusion exist. The only proviso laid down in Cronje’s case is that the relevant conditional term in the original agreement be at the same time varied so as to prevent the agreement again “self-destructing” on account thereof.’[7]

 

[28]    In Cronje the court pointed out that ‘it is no longer a question simply whether the original agreement (at least as to its material terms) has again become effective or not; it becomes necessary to look at the consensus of the reviving agreement to determine which clause or clauses of the original written agreement would not be revived’.[8] Goldfields argues that ‘the consensus of the parties as expressed in the Second and Third Addenda’ revived the principal agreement and on such terms as would have protected the revived agreement from self-destruction.[9]

 

[29]    The argument advanced on behalf of Flaming Silver and Siyakhula is simple and straightforward. It is the following. The extension of the conditions precedent in terms of the first and third addenda are in direct contravention of clause 3.2 of the principal agreement. In terms of that clause any extension of a due date is required to be agreed to in writing prior to the due date of its fulfilment. If the parties intended to revive the principal agreement as contended by Goldfields, they would have been obliged to eliminate the operation of clause 3.2 or amend it. Goldfields has not relied on a tacit term in that regard, and, in any event, such a term could not be implied while clause 3.2 remained intact. Second, while there is clearly an intention to amend the principal agreement in certain respects there is no intention discernible from the second or third addenda to ‘revive’ the principal agreement.

 

[30]    The exercise of determining whether the principal agreement was revived, involves an interpretation of that agreement and at least of the first, second and third addenda. The proper approach to contractual interpretation is now trite and is usefully summarised in the recent decision of this Court in Capitec as follows:

‘It is the language used, understood in the context in which it is used, and having regard to the purpose of the provision that constitutes the unitary exercise of interpretation…[t]he triad of text, context and purpose should not be used in a mechanical fashion. It is the relationship between the words used, the concept expressed by the words and the place of the contested provision within the scheme of the agreement (or instrument) as a whole that constitute the enterprise by recourse to which a coherent and salient interpretation is determined.’[10]

 

[31]    The wording of the principal agreement, and of the addenda, is reasonably clear and unambiguous. None of the cases relied upon by Goldfields have been shown to have had a clause like clause 3.2 of the principal agreement. It provides, in effect, that if the finance condition (ie the condition in clause 3.1.1) is not fulfilled on or before 31 January 2018, or any of the other conditions are not met by the due date stipulated in the principal agreement, the principal agreement will lapse and be of no force and effect, unless date(s) for the fulfilment of those conditions are extended by the parties in writing, before those expiry dates.

 

[32]    In clause 4 of the first addendum the expiry date of ‘31 January 2018’ for the fulfilment of the finance condition (ie clause 3.1.1) and the consent condition (clause 3.1.3) was changed to a later date, ie to 31 March 2018. The date for the fulfilment of the payment condition remained as originally agreed, namely within 60 (sixty) calendar days calculated from the date of the signature of the principal agreement, ie 1 November 2017. It is common cause that those 60 days would have expired on 1 or 2 January 2018. In terms of clause 5.1 of the first addendum, which was concluded on 1 December 2017, ie before the expiry dates of those three conditions precedent, clause 3.2 of the principal agreement is preserved. Clause 5.1 of the first addendum confirms that subject to the terms of that addendum, the other terms of the principal agreement, which include clause 3.2, remain of full force and effect and are not amended by the terms of the first addendum. That addendum thus appears to have been in accordance with clause 3.2 of the principal agreement and does not purport to be anything other than an agreement to vary certain terms of the principal agreement.

 

[33]    The payment condition was not fulfilled by the due date, ie on 1 or 2 January 2018. In terms of the second addendum, which was concluded on 3 May 2018 (ie after the expiry date for the fulfilment of the payment condition), the parties purported to put in place a ‘deeming’ provision. In terms of clause 3.3 of that addendum they purported to agree that the finance and the payment conditions had been fulfilled by no later than 31 March 2018. There are certain difficulties with that agreement. First, although the payment of R10 million was made by Flaming Silver into the account of the attorneys, purportedly as contemplated in clause 6 of the principal agreement, an amount of R1.00 (one rand) of the purchase price was still outstanding, because in terms of the principal agreement the amount payable was R10 million and one rand. Second, the finance condition, as spelt out in the principal agreement, had not been fulfilled at all by 31 March 2018. The second addendum thus, effectively purported to extend or neutralise the due dates for the fulfilment of the finance and payment conditions by means of introducing a ‘deeming’ provision after the expiry of those due dates.

 

[34]    The question that arises is whether the parties could do what they purportedly did in terms of the second addendum, notwithstanding the fact that clause 3.2 of the principal agreement was and remained in full force and effect throughout. While an extension after the due date was, in those circumstances futile because of what the parties had agreed to in clause 3.2, namely, that it is only an extension agreed to before the expiry of the due date that is valid and effective, a deeming of the fulfilment after the due date, which effectively remains ‘a fiction’, cannot be any different. The parties were at liberty to introduce the deeming provision before the due date, but when they did not do so and the due date came and passed, the principal agreement lapsed and no longer had any force or effect. Even if their agreement could be construed as something in the nature of an attempt at a waiver, it is a trite principle of law that if a contract places a time limit for the fulfilment of a condition, the party for whose benefit it was imposed cannot waive it after the time limit has expired.[11]

 

[35]    In terms of the authorities relied on by Goldfields, a lapsed agreement may be revived by the parties. Assuming they could do so despite clause 3.2 of the principal agreement, there is nothing in the second addendum that evinces an intention on the part of any of the parties to ‘revive’ the principal agreement. They clearly proceeded to conclude the second addendum in ignorance of the fact that the principal agreement had in law lapsed and required specific revival. Even if one assumes that it evinced an intention to revive the principal agreement, a fatal shortfall is the fact that at the very best for Goldfields, and at the very worst for Flaming Silver and Siyakhula, the second addendum ‘self-destructed’ when the consent condition was not fulfilled by or before 30 July 2018, as envisaged in clause 4.3 of the second addendum. The third addendum was only concluded on 2 August 2018 and could not save or bring about the revival of the second addendum, or the principal agreement.

 

[36]    Similar criticism can be levelled at the third addendum. It was concluded on 2 August 2018, and it purported, inter alia, to amend the due date for the fulfilment of the consent condition from ‘30 July 2018’ to ‘31 October 2018’, ie after the extended due date purportedly agreed to in terms of the second addendum. And the third addendum ‘self–destructed’ with the rest, when the consent condition was not fulfilled on 31 October 2018. The attempt to ‘revive’ the agreement again by means of the fourth addendum was futile and in vain. And even when that addendum was purportedly concluded on 31 October 2018, the consent condition had still not been fulfilled.

 

[37]    Whatever the arguments of Goldfields may be, and even if one assumes that the second and third addenda somehow managed to revive the principal agreement, ultimately, the whole of that agreement (inclusive of the addenda) would have come to an end and be of no force and effect when the consent condition was not fulfilled on its due date, ie on 31 October 2018.

 

[38]    Turning to the second issue, namely relating to the repayment of the R1 million to Siyakhula, alternatively, to Flaming Silver, Goldfields resists the repayment, arguing that the payment of the R1 million to it was in terms of clause 4.3.2 of the third addendum. And that the clause is a self-standing agreement, because although it was part of the third addendum it could survive separately from it, and that the payment in terms of that clause was non-refundable and was not subject to the fulfilment of any condition.

 

[39]    This argument is clearly erroneous because properly constructed clause 4.3.2 is integral to the third addendum, and its fate is linked to that of the third addendum. It ceased to be enforceable when the principal agreement became unenforceable. The payment was to serve as a part or ‘pre-payment’ of the purchase price, ie for what was being purchased in terms of the principal agreement. Since that agreement had lapsed (on any of the bases dealt with above) there was no obligation on Goldfields to sell the shares and claims to Flaming Silver or Siyakhula, and no reciprocal obligation on them to purchase the same. There was thus no obligation to pay any amount in respect of that purchase, and in the circumstances the amount is recoverable on the basis of unjust enrichment.[12] It follows that the appeal must fail. There is no reason why the normal costs award should not be made.

 

[40]    In the result the following is ordered:

The appeal is dismissed with costs.

 

 

P COPPIN

ACTING JUDGE OF APPEAL

 

Appearances

For the appellant:	B C Stoop SC
Instructed by:	Barnard Inc., Pretoria
	Phatshoane Henney Attorneys, Bloemfontein
For the first and second respondents:	C A Boonzaaier
Instructed by:	Mouton Inc., Pretoria
	McIntyre Van Der Post, Bloemfontein.

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