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					                                         FORM A
                    FILING SHEET FOR EASTERN CAPE JUDGMENT

                                                              ECJ no : 90

PARTIES:

CRAIG RICHARD LINDHORST                           First Plaintiff
BRIAN RICHARD LINDHORST                           Second Plaintiff
GAVIN ROBIN RAMSAY                                Third Plaintiff
CHRISTOPHER BASIL LINDHORST                       Fourth Plaintiff

and

MARK GREGORY ANDERSEN                             First Defendant
LINDA ANN ANDERSEN                                Second Defendant
KWELERA NATURE RESERVE (Pty) Ltd                  Third Defendant
SKYPROPS 71 (Pty) Ltd                             Fourth Defendant




REFERENCE NUMBERS -
      Registrar:        329/03

                         EL   130/03

      Magistrate:

      High Court:       East London Division
DATE HEARD: 11 May 2006
DATE DELIVERED:  7 December 2006

JUDGE(S): Leach J

LEGAL REPRESENTATIVES -
Appearances

      for the State/Applicant(s)/Appellant(s):Adv Smuts (SC) and Adv Dugmore
      for the accused/respondent(s): Adv. Ford (SC) and Adv Taljaard



Instructing attorneys:
      Applicant(s)/Appellant(s): Yazbeks
      Respondent(s): Campos



CASE INFORMATION -
                              2


   Nature of proceedings :

   Topic:

   Keywords:
                                            3




THE HIGH COURT OF SOUTH AFRICA

(EAST LONDON DIVISION)

                                                         CASE NO: 329/03

                                                                EL    130/03

In the matter between:

CRAIG RICHARD LINDHORST                           First Plaintiff
BRIAN RICHARD LINDHORST                           Second Plaintiff
GAVIN ROBIN RAMSAY                                Third Plaintiff
CHRISTOPHER BASIL LINDHORST                       Fourth Plaintiff

and

MARK GREGORY ANDERSEN                             First Defendant
LINDA ANN ANDERSEN                                Second Defendant
KWELERA NATURE RESERVE (Pty) Ltd                  Third Defendant
SKYPROPS 71 (Pty) Ltd                             Fourth Defendant



                             JUDGMENT
   ______________________________________________________________

LEACH, J

The Kwelera river flows in an easterly direction, reaching the Indian Ocean just to the

north of East London. Close to the river mouth and adjacent to its southern bank, is

a piece of immovable property formerly known as Riverdale Farm but now known as

the Kwelera Nature Reserve (for convenience, I shall refer to it as “the reserve”).



The reserve, which lies at the heart of the dispute of these proceedings, is divided by

a tarred road which runs in an easterly direction from the Mthatha-East London main

road south of the river to the village of Kwelera at the mouth of the river. The bulk of

the reserve lies to the north of this road, between it and the river. Also to the north of

the road, bordering on the reserve, is an unusual residential development known as
                                          4


Whats Landing on which there is a runway for light aircraft as well as a number of

luxurious residential homes. The purpose of this development is to provide a

restricted number of wealthy individuals with housing, from which they can fly back

and forth without using the East London airport.



In circumstances that will be set out more fully below, the reserve was purchased in

1998 by a company known as Skyprops 71 (Pty) Ltd, the registered name of which

was changed on 19 October 1998 to Kwelera Nature Reserve (Pty) Ltd (the third

defendant).   The third defendant’s shares are held by an entity known as the

Daneswold Family Trust of which Mark Andersen and his wife Linda, respectively the

first and second defendants, are the trustees.



The first and fourth plaintiffs, Craig and Christopher Lindhorst, are brothers who both

live at Whats Landing. So do the first and second defendant as well as Niels

Andersen, the first defendant's brother. As they were all referred to by their names

during the course of evidence, for convenience I also intend to do so in this

judgment.



Craig and Christopher conduct certain of their business activities through the

medium of two trusts, the Craig Richard Lindhorst Family Trust and the Christopher

Basil Lindhorst Family Trust of which they are, respectively, trustees and

beneficiaries. They instituted these proceedings in their capacities as trustees of

their respective trusts, claiming that their trusts had purchased fifty percent of the

shares in the third defendant from the Daneswold Family Trust at an agreed

purchase price of R1 million, that they have paid that price but that, despite demand,
                                                  5


such shares have not been transferred to them. They therefore seek an order for

specific performance in that regard viz. delivery of the shares.



While it is at the very least common cause that Craig, acting on behalf of an entity

other than himself, had agreed with Mark to buy fifty percent of the shareholding in

the third defendant at an agreed price of R1 million which the plaintiffs have paid, the

defendants contend that the sale was subject to a suspensive condition that a

shareholders’ agreement be concluded, that no such agreement has been concluded

and that,     as the suspensive condition has never been fulfilled, no contractual

relationship between the parties came into being. They therefore tendered to return

the R1 million paid for the fifty percent shareholding in the third defendant. As the

latter's only real asset, the reserve, is today worth substantially more than what it

was back in 1998, it would be inherently unfair for the plaintiffs now to receive merely

that which they paid, and the offer in the pleadings to refund them the R1 million was

ameliorated by the defendants making an open tender to pay a sum of R2 067

468,50 – an amount arrived at             by calculating what a lump sum of R1 million,

invested in a money market account in 1998 when payment was made, would be

worth today. In the light of the undisputed evidence led by the plaintiffs that the

reserve is now worth some R8 million,1 the tender was insufficient to induce the

plaintiffs to settle.



While the plaintiffs admit that that the parties have not signed a shareholders’

agreement, they deny that that is due to any fault attributable to them. In any event,

they also deny that the sale was ever subject to the suspensive condition advanced

1
 The defendants had given expert notices of witnesses who were to have testified that it was only
worth some R4 000 000,00 but they were not called.
                                           6


by the defendants, and although there are a myriad of other issues which arise out of

the pleadings, the first and most important issue to be decided is whether the sale of

the shareholding in the third defendant was subject to this alleged condition.



But before dealing with that issue, it is necessary to set out the relevant factual

background. In doing so, I should record that the trial lasted several weeks during

the course of which the facts were examined repeatedly and in minute detail. In my

view, it would be an unnecessary exercise for me to attempt to assay the minutiae of

all the evidence and, for present purposes, I intend, rather, to summarise that which I

perceive to be relevant.



Like all good stories, it is probably best to start at the beginning. Both Craig and

Mark are men of considerable wealth. Craig is the fourth generation of a family that

has traded in that area in the Eastern Cape commonly known as Transkei. He and

his father, Brian, established the Kokwetu Trading Company with which they went

into business together in 1985. The company appears to have gone from strength to

strength. From an initial operation at Idutwya, it has expanded considerably and now

conducts a chain of wholesale and retail supermarkets with outlets also at Cala,

Butterworth, Kentani and Good Hope. A younger brother, Christopher, the fourth

defendant, later joined the business when he left school. As a result of financial

advice they received, the Lindhorsts later created trusts in which to hold their

business interests and to which they transferred their shares in Kokwethu – with the

Craig Richard Lindhorst Family Trust and the Brian Lindhorst Investment Trust each
                                                     7


getting forty shares while twenty shares were transferred to the Christopher Basil

Lindhorst Family Trust.2



Turning to Mark, he is a self made millionaire who started from scratch. Initially

employed as a salesman for a seed company, he branched out on his own in a

similar business, and prospered.              He is clearly a person of substantial business

acumen as his business interests burgeoned and, today, he heads a substantial

business empire.



Both Craig and Mark share a common love of flying. Craig flies a helicopter while

Mark flies fixed wing aircraft. Not only did their paths cross as a result of their

involvement in the East London Flying Club, but also as a result of one Mark’s

companies, known as Seedplan, having marketed its products through the Kokwethu

businesses in Transkei.



Mark and Craig’s interest in flying led to them being founders of What’s Landing

when it was established in 1997.                 In order to develop Whats Landing, various

interested parties, including Craig, Mark and Niels, teamed up and put money into a

company they called Koala Bare3 which was used to purchase the land and to effect

the necessary developments.              A portion of the property was divided into residential

plots and each of them bought a plot on which they built a home. Craig later bought

the plot next to his where a home was built for his parents in-law. Christopher has

since also established his residence there.
2
  On 1 June 2001, as a result of Brian Lindhorst retiring, he sold his 40 shares to his sons, with 26
shares being transferred to the Craig Richard Lindhorst Family Trust and the remaining 14 shares
being transferred to the Christopher Basil Lindhorst Family Trust.

3
    Largely an acronym formed from the first letters of their surnames.
                                                   8




In addition to his passion for flying, Mark has a passion for nature and its

conservation. During the course of the establishment of Whats Landing, he became

aware that a Mr Kruse, who had become disenchanted with the authorities relating to

an application for rezoning that he had made, might be in the market to sell his

neighbouring farm, Riverdale. Mark knew the farm well, having rented a boathouse

on the river there for several years. Not only does the property have river frontage

along the Kwelera, but it is also crossed by the Dwa-Dwa river, a tributary of the

Kwelera, alongside which are substantial areas of natural vegetation and forests.

Charged by a dream of turning the farm into a nature reserve, Mark embarked upon

lengthy and convoluted negotiations with Kruse which eventually culminated in a

written agreement of sale being signed by them in late January 1998.4 As is set out

in the deed of sale, Mark or his nominee agreed to purchase the farm from Kruse for

R1,8m to be paid in cash against registration of transfer which, it was agreed, was

to be effected as close as possible to 31 July 1998.5 Mark ultimately used Skyprops

71 (Pty) Ltd as his nominee under the sale and as the vehicle to develop the project.

It was pursuant to this agreement that the third defendant came to own the reserve.



Although Mark is a wealthy individual who alleged that he could himself have found

the R1,8 million needed to purchase the property, he conceded it would have left his

bank account “a bit lean” and in about April or May 1998 he talked to his brother,

Niels, about joining him in the venture. Niels expressed interest in doing so but was

told that if he wanted to become involved, he would have to put up the money for a

share. Although Niels initially felt that he lacked the necessary capital to do so at that
4
  Exhibit B 30-32.
5
  They reached agreement on that date so as to give Kruse sufficient time to build a dairy at his new
farm and to move his dairy herd off the property.
                                            9


time, he went to Denmark where he was able to make arrangements to obtain

sufficient family finance to enable him to participate in the venture.



On his return from Europe, Niels was employed by one of Mark’s companies. In the

course of his work, he met with Craig at his supermarket in Transkei and a

discussion took place between them in regard to Mark’s plan to develop a nature

reserve at Kwelera. The precise ambit of their discussion is a matter of some

dispute. According to Niels, he merely broadly sketched Mark's plans and suggested

to Craig that if he was interested in becoming involved in the development of the

reserve, Mark might be prepared to sell him a share. On the other hand, Craig

testified that, as far as he could recall, Niels had told him that Mark was looking for

investors and would be prepared to offer him a 50% shareholding in the reserve.

Niels denied having said that and Mark denied having been on the lookout for

potential investors at that time.



It does not seem to me to be necessary to resolve exactly what passed between

Niels and Mark at their meeting at the supermarket. Whatever may have been said,

it led to Craig approaching Mark about becoming involved in the reserve. According

to Mark, Koala Bare was at that stage, as he put it, “getting into full swing” and, at a

meeting in regard to the development, Craig remarked to him that he had heard that

he had bought the farm and asked whether he could possibly be accommodated in

the project. He replied that he would think about it and that Craig should come and

have a look at the property.
                                                  10


By that time, although Mark had not yet taken transfer of the farm, Kruse had given

him full access to the property. He therefore arranged to meet Craig there a few

days later, and the two of them went down to a boathouse where he kept a boat

which they took and went up the river to a camp site he had already established.

During the course of their trip, he explained his vision of a self-sustaining nature

reserve which would obviously be most pleasant for both of them to use once they

were living at Whats Landing.



It is common cause that Craig liked what he saw and expressed interest in becoming

involved in the project. He testified that he told Mark that he needed to discuss the

matter with his parents who were away at the time, and that he would revert to him

once he had done so. Mark, on the other hand, testified that Craig had expressed

interest in acquiring a stake in the project, that he had told him that he would think

about it and that they would discuss it further at a solo party to be held a few days

later at the East London Flying Club6 on 20 June 1998.7



It is common cause that both Craig and Mark attended this event. According to

Mark, the two of them had a long and detailed discussion about the venture during

the course of which he agreed, in principle, to selling Craig a third share in the

venture. Although Niels was also at the solo party, he is apparently something of a

party animal and had other things on his mind, and although he says he saw Mark

and Craig talking to each other at one stage, he did not join them or enter into the

negotiations. However, according to Mark, he and Craig agreed that the two of them

and Niels would each have an equal one-third share. Mark further testified that he
6
 Of which they were both members.
7
 Apparently it has become customarily for a social party to be held to celebrate the event of a trainee
pilot flying solo for the first time.
                                          11


and Craig had reached agreement on all the material terms, including that their

agreement would be conditional upon a shareholders’ agreement being prepared,

and that Craig undertook to have his attorney prepare such an agreement. He also

specifically asked Craig to shake hands on the deal, which they did.



Craig's recollection of the meeting at the Flying Club is substantially different.

According to him, he and Mark merely had a brief discussion. His parents were

away as I have said, and as his involvement in the scheme would require a

substantial capital withdrawal from his business interests in Transkei to finance it, he

was not prepared to commit himself until he was able to discuss the matter with his

father. He therefore categorically denied that he had reached agreement in principle

on all the terms of an involvement in the project or that he had undertaken to have a

shareholder’s agreement prepared and shaken hands with Mark on the deal. He

was also emphatic that it had never been suggested at any stage that he was

negotiating for anything less than half the shareholding.



Craig said that a few days later, on 23 June 1998, he took his father, Brian, who had

since returned from his holiday, to view the farm.          He flew by helicopter from

Transkei, landed at the East London airport where he picked up Brian, and

proceeded to fly to the property for him to view it from the air. Brian liked what he

saw but told him that he first needed to discuss the matter with his wife before giving

his approval. At that stage, Craig was prepared to let both Brian and Christopher

share his half of the shareholding with him. A few days later, Brian told him that due

to his retirement being on the horizon, he would not become involved but that he felt

it was an excellent opportunity for Craig and Christopher and that he was agreeable
                                          12


to them using their investment in Kokwethu to fund and become involved in the

venture.



Consequently, on 29 June 1998 (which happened to be his birthday) Craig arranged

to meet Mark at his offices at Seedplan at the East London suburb of Gonubie. He

took his father with him, not only as he was a trustee of his trust which was going to

be used as the vehicle for his involvement in the venture, but also in an advisory

capacity and as he wanted to make Brian feel comfortable about the money coming

out of the family company being spent wisely. According to Craig, after Mark had

outlined his plans for the property for the benefit of his father, it was agreed that he

would acquire a 50% shareholding in the third defendant against payment of R1

million – being R900 000,00 in respect of 50% of the purchase price of the farm,

with a further R100 000,00 to recompense Mark for his time and effort in acquiring

the farm and transferring the shares.



It is Craig’s case that the contract was a straightforward sale of 50% of the

shareholding in the third defendant against payment of an agreed price of R1 million,

and that while it was mentioned that a shareholders’ agreement would be drawn up

in due course, the sale of the shares had never been conditional upon that being

done.      It was also his case that it was understood during the negotiations at

Seedplan that although he would be acquiring 50% of the shareholding, he would in

due course bring his Christopher into the venture and share his half with him.



Craig's version was materially supported by his father, Brian, who confirmed that he

had been flown over the property by Craig a few days before the Seedplan meeting
                                          13


on 29 June 1998.     He stated that during the course of that meeting, Mark had

described his vision – which included fencing in the reserve, stocking it with game

and building self contained units – and also confirmed that Mark had agreed to sell

50% of the shares in the third defendant to Craig's trust against payment of R1

million, but that there had no suggestion of this sale being conditional upon anything,

and that Craig had in no way undertaken to arrange a shareholders’ agreement.



Mark's description of the negotiations was substantially different. As I have already

indicated, he denied having merely a brief discussion with Craig at the Flying Club

solo party on 20 June 1998, it being his version that they had a lengthy and detailed

discussion which culminated in them shaking hands on the deal, the material terms

of which were, inter alia, that Craig would acquire no more than a one-third share in

the third defendant, that the enterprise would pursue the vision of a self-sustaining

and economically viable nature reserve, that this vision would be set out in a

shareholders’ agreement which Craig would have prepared, that Mark would retain a

veto right on development decisions and would be managing director of the company

and that, until the shareholders’ agreement was concluded, no share transfer would

be effected.



Mark also testified that he met with Craig on the farm on 23 June 1998 when Craig

landed there with his helicopter – something which Craig testified just did not

happen. According to Mark, not only did Craig land on the farm but they had a

discussion during the course of which Craig asked him when he wanted him to pay

his half share of the purchase price. This came as a surprise to him as their earlier

agreement had been that Craig would purchase a third share.           And so he said
                                              14


something along the lines of “Hang on, what do you meant your half? It’s Niels,

yourself and me”. To this, Craig replied that he had understood the agreement to be

that the Andersens and the Lindhorsts would share equally in the venture. In fact,

according to Mark, Craig explained that the contracting party would be a trust

involving what he described as being the “greater Lindhorst family” which benefited

both his brother and his parents. Although this differed from their agreement of a

few days earlier, he agreed to sell half of the shareholding to this trust but, in doing

so, he stressed that he was only prepared to do so if he was protected in the

shareholders’ agreement which, he emphasized, was of paramount importance. He

also alleged that Craig stated that he would attend to the shareholders’ agreement

immediately. As the entity doing the deal was a family trust, Craig also asked him if

he would be prepared to meet him together with his father to whom he could explain

the details of the venture. He agreed to do so, and it was this that led to a

subsequent meeting held at his offices at Seedplan on 29 July 1998.



Mark also alleged that after his meeting on the farm with Craig on 23 July, he had

met with his brother, Niels, and explained that things had changed and that the

venture had agreed to extending the Lindhorst family a 50% shareholding in the

venture which, he said, was effectively going to be “of the age group, two brothers

and two brothers”.



Mark alleged that it was pursuant to this meeting on the property          that he had

prepared the document, annexure P1 to the pleadings.8 Headed “Progress Report –

Riversdale Farm” it records that Skyprops 71 (Pty) Ltd had been formed and that


8
    The document is also exhibit A 158-160.
                                            15


there had been a request for a name change to Kwelera River Sanctuary or a

number of other alternatives, including Kwelera Nature Reserve. It then goes on to

read:

“(2) Agreement on a development plan needs to be detailed into a shareholders agreement.
      See attached proposals.
 (3) Once shareholders agreement is in place then Accurate Trading IV (Pty) Ltd will
     purchase 50% of the shares in Skyprops 71 for a cash consideration of R1 000 000,00
     and Craig Lindhorst (and/or family) will purchase the other 50% for R1 000 000,00. The
     deadline for this is end of June 1998”.

To this are attached two further pages in which, under the heading “Development

Proposals”, details of the work envisaged in the development of the property in three

phases are set out – the first involving, inter alia, the cleaning up of the property, the

removal of internal fencing, the erection of game proof fencing and the establishment

of hiking and horse trials – the second being the subdivision of the property and the

sale of plots – the third being the establishment of a conference centre and resort.



The plaintiffs obviously viewed this document with great suspicion, particularly as it

was completed on different types of paper using different pens, and they felt that it

might well amount to a fabrication of evidence.          The unusual features of this

document mentioned by the plaintiffs’ expert on falsified documents, Bester, certainly

do give rise to justifiable suspicion, but there is nothing to show that Mark's

explanations are false, and there is certainly no basis for me to find that he fabricated

the document. Mark averred that he had prepared this document to reflect items for

discussion at the meeting and, although he had not handed it over to either Craig or

Brian, he stated he could have had it before him on his desk and probably made use

of it during the course of their meeting.
                                           16


According to Mark, at the meeting at Seedplan on 29 June 1998, after wishing Craig

a happy birthday, he ran through his proposals in regard to the property more or less

as they are set out in the so called “progress report”. He said that he stressed that

they really needed to agree on the details of the development because that was

paramount in regard to the shareholders’ agreement. He stated that he asked Craig

if he had seen his attorney the previous week about such an agreement, but he had

replied that he had been terribly busy but would attend to it.



As is apparent from what I have set out above, there are substantial discrepancies

between the two sides involved in the negotiations which led to the contract between

them as to what was discussed and when such discussions took place. Considering

the lapse of more than six years before they testified in regard thereto, these

discrepancies are not surprising.        What is of importance is that, whatever

discussions may have taken place during the various meetings that occurred from

the time of the boat trip on the Kwelera river in mid-June 1998 until the conclusion of

the meeting at Seedplan on 29 June 1998, Mark had agreed to sell 50% of the

shareholding in the third defendant to a trust Craig represented for the benefit of

himself and his family against payment of a purchase price of R1 million. And while

there may be a dispute to whether the conclusion of a shareholders’ agreement was

a condition precedent for the coming in to force of the agreement which Craig and

Mark had concluded, it is at the very least common cause that they were ad idem

that such an agreement had been discussed and would be drawn up in the future. A

considerable amount of time was spent during the course of the trial in regard to who

had borne the responsibility having such an agreement prepared.
                                             17


It certainly appears to have been accepted that Attorney Ben van Rensburg should

be approached to do so, and that this suggestion arose as he was an attorney who

had done some work for Craig's father, Brian. Possibly this led to the confusion

which reigned, and there certainly seems to have been a breakdown in

communication between Craig and Mark in regard to this issue, with each thinking

the other was to attend to the matter. But, in any event, Ben van Rensburg was

finally approached by Mark in this regard.



Ben van Rensburg is an attorney who practices in East London. He had done some

work for Craig’s father, Brian, with whom he played golf, and had a vague idea of the

proposed development at the reserve. It is common cause that, late in 1998, Mark

arrived at his offices and spent some time explaining to him his vision for the

property and the establishment of a nature reserve and chalets. Van Rensburg

never took notes of this interview and did not open a file. Indeed he appears to have

been somewhat bemused as to why Mark had come to see him and, although it

appears that a shareholders’ agreement was mentioned, he seems never to have

understood that he had been instructed to draft such an agreement. If he had, he

said, he would have taken proper notes and instructions, including details as to

shareholdings, boating, special resolutions, etc which should normally be

incorporated into such an agreement and that he would then have done something

about preparing a draft. Instead, he did nothing about the matter after Mark had left

because he didn’t regard himself as holding instructions to do to do anything (he did

not even seek to charge a fee).
                                          18


Time passed, and nothing was done to obtain a shareholders’ agreement.

Eventually, in March 2000 when it became apparent that Ben Van Rensburg was not

going to do anything about the matter, Mark approached attorney Anton van

Rensburg who, during the months that followed, prepared a series of draft

shareholders’ agreements. Unfortunately, Mark had his hands full at that time. Not

only was he extremely busy but he experienced a number of business crises, was

away from East London for extended periods and spent some time in hospital with

serious heart problems.    Consequently, he did not give his full attention to the

various drafts although he did, from time to time, express dissatisfaction with certain

clauses which Anton Van Rensburg had inserted into the drafts he had prepared.

He clearly became increasingly dissatisfied with Anton’s efforts and, eventually,

decided to abandon him. He was at the time extremely busy in Johannesburg where

he had built up a relationship with an attorney by the name of Campos to whom he

turned with an instruction to draft a shareholders’ agreement. With this end in view,

during the Easter week-end of 2002, Campos stayed with Mark and visited the

reserve. Unfortunately, due to various other pressing commitments, it was only by

November 2001 and after Niels had asked him to expedite the matter, that Campos

got around to preparing a draft.



The Campos draft agreement formed the basis of discussions between the parties at

a meeting on 6 December 2002 which both Mark and Craig attended. Mark was

accompanied by Campos.        Anton Van Rensburg was also there.         According to

Campos, he viewed Anton Van Rensburg as Craig's attorney. How he could have

perceived that to be the case, I am not sure as Anton’s mandate to prepare a

shareholders’ agreement on behalf of both Mark and Craig had never been formally
                                          19


terminated and he explicitly stated at the meeting that he was there purely to attempt

to facilitate agreement between the two factions. Both he and Campos appear to me

to have been somewhat short sighted in regard to the question of representation, but

it is not necessary to apportion blame. What is clear is that after the discussions,

during which all the outstanding issues were canvassed, it appeared as if in all

probability agreement had been reached and Campos went off and drafted a revised

agreement which he later made available to Craig.



In response, Anton addressed a letter to Mark on 20 December 20029, raising a

number of issues which Craig wished to discuss further, including the use of the

boathouses, an issue which had been a particularly contentious. Despite the parties

being so close to reaching agreement on a binding shareholders’ agreement, and it

seems influenced somewhat by Campos's attitude, Mark felt that agreement had

been already reached on these issues and was not prepared to discuss them any

further. And so the settlement floundered. This was extremely unfortunate as with a

little bit more tact, patience and negotiation, I am sure that a settlement could have

been reached and these proceedings would never have been necessary. Be that as

it may, no such agreement was forthcoming and, as no binding shareholders’

agreement came into being, Mark refused to transfer 50% of the shareholding in the

third defendant to Craig, Christopher or their trusts and, in due course, these

proceedings were instituted.



In the light of this background, I turn now to consider the issues between the parties.

As I have set out above, there is a material conflict between the respective sides as


9
    Exhibit A 621-626.
                                                20


to whether their negotiations resulted in their contract being conditional upon the

conclusion of a binding shareholders’ agreement. As the plaintiffs seek to prove an

agreement which, on their version, excludes the contract being conditional in this

way, they bear the onus proving that it did not include the terms relied upon by the

defendants.10 In considering whether the plaintiffs have discharged this onus in the

light of the contradictory evidence in regard thereto, it is necessary to bear in mind

the approach set out in National Employers’ General Insurance Coy. Ltd v Jagers

1984 (4) SA 437 (E) at 440-44111 where Eksteen J, as he then was, said:


       “It seems to me, with respect, that in any civil case, as in any criminal case, the onus
       can ordinarily only be discharged by adducing credible evidence to support the case
       of the party on whom the onus rests. In a civil case the onus is obviously not as
       heavy as it is in a criminal case, but nevertheless where the onus rests on the plaintiff
       as in the present case, and where there are two mutually destructive stories, he can
       only succeed if he satisfies the Court on a preponderance of probabilities that his
       version is true and accurate and therefore acceptable, and that the other version
       advanced by the defendant is therefore false or mistaken and falls to be rejected. In
       deciding whether that evidence is true or not the Court will weigh up and test the
       plaintiff's allegations against the general probabilities. The estimate of the credibility
       of a witness will therefore be inextricably bound up with a consideration of the
       probabilities of the case and, if the balance of probabilities favours the plaintiff, then
       the Court will accept his version as being probably true. If however the probabilities
       are evenly balanced in the sense that they do not favour the plaintiff's case any more
       than they do the defendant's, the plaintiff can only succeed if the Court nevertheless
       believes him and is satisfied that his evidence is true and that the defendant's version
       is false.……I would merely stress however that when in such circumstances one
       talks about a plaintiff having discharged the onus which rested upon him on a
       balance of probabilities one really means that I the Court is satisfied on a balance of
       probabilities that he was telling the truth and that his version was therefore
       acceptable. It does not seem to me to be desirable for a Court first to consider the
       question of the credibility of the witnesses as the trial Judge did in the present case,
       and then, having concluded that enquiry, to consider the probabilities of the case, as
       though the two aspects constitute separate fields of enquiry. In fact, as I have pointed
       out, it is only where a consideration of the probabilities fails to indicate where the
       truth probably lies, that recourse is had to an estimate of relative credibility apart from
       the probabilities.”




10
   See for e.g.Topaz Kitchens (Pty) Ltd v Naboom Spar (Edms) Bpk 1976 (3) SA 470 (A) and Stocks
and Stocks (Pty) Ltd v TJ Daly & Sons (Pty) Ltd 1979 (3) SA 754 (A) at 762 G-H and the cases there
cited.
11
   A dictum regularly followed, inter alia, in Dreyer NO & Another v AXZS Industries (Pty) Ltd
unreported SCA case no 250/04 delivered 26 September 2005.
                                            21


In considering whether an oral agreement contained a particular clause expressly

alleged by one party but denied by the other, actions often speak louder than words,

and the manner in which the parties conducted themselves after the conclusion of

the agreement often forms a reliable basis for inferring what their actual agreement

had been. Bearing this in mind, for the reasons set out below, the probabilities seem

to me to be wholly in favour of the plaintiffs.



Firstly, although Craig was an extremely successful and experienced businessman,

the Lindhorst business empire was a family affair and it seems to me to be extremely

likely that he was not prepared to commit himself to a venture which would have

required a substantial capital withdrawal from the family business before he had

been able to discuss the matter with his father and obtain his approval. This he

could not do until after the meeting at the Flying Club. While I am prepared to accept

that he clearly indicated to Mark that he was extremely interested in becoming

involved in the project, the probabilities appear to be overwhelming that he would not

have been prepared to have committed himself to the venture at the Flying Club as

Mark said was the case (or indeed at any subsequent meeting on the farm) but only

once his father, Brian, had viewed the property and had been able to engage with

Mark about the project.       I therefore find Mark’s evidence that agreement was

reached at the Flying Club on 20 June 1998 to be inherently improbable and Craig's

version that agreement was only reached once he had his father's approval at the

Seedplan meeting to be far more likely.



As I have said, Craig testified that although the issue of a shareholders’ agreement

was mentioned at the Seedplan meeting, he had not undertaken to arrange for the
                                          22


preparation of such an agreement. He explained that, at that stage, he simply did

not have the experience and expertise to ensure that an adequate agreement was

drawn. It was argued on behalf of the defendants that this was wholly unacceptable

as Craig was an experienced and extremely successful businessman but, as Craig

also explained, the Lindhorst business empire was a family affair (albeit a most

successful one) and I therefore do not find it at all surprising for him to say that he

knew nothing about shareholders’ agreements and the like. Certainly, Mark, whose

business expertise appears to be substantially more wide-ranging than that of Craig,

would have been in a better position to have arranged such an agreement.



Of course, as I have mentioned, Mark stated that when he and Craig had reached

agreement in principle at the Flying Club on 20 June 1998, Craig had acceded to his

request to attend to the preparation of a shareholders’ agreement and that,

subsequently, during the meeting at the reserve held on 23 June 1998, Craig had

repeated his undertaking in that regard. Mark also testified that, at the Seedplan

meeting, Craig had reassured him that he was attending to the preparation of the

shareholders’ agreement – an averment he repeated on 27 July 1998 when he paid

Mark the R1 million he’d agreed to pay for the shares in the third defendant.

However, in my view, it is inherently improbable that, if Craig had been as keen as

he clearly was to become involved in the project, he would not have gone to see

attorney to have such an agreement prepared if he had indeed repeatedly

undertaken to do so as Mark alleged, particularly if it had been stressed (as Mark

was so emphatic had been the case) that such an agreement was a precondition to

his involvement in the scheme. Accordingly, if the parties had so clearly agreed that

the sale of the shares in the third defendant was conditional upon the preparation of
                                           23


this shareholders’ agreement and that Craig would do the necessary in ensuring that

such an agreement was obtained, the breakdown in communication in regard to who

was responsible for organizing the agreement was hardly likely to have occurred and

Craig's failure to do so would be absolutely inexplicable. The fact that no

shareholders’ agreement was concluded, or that no attorney was instructed to

prepare such an agreement as a matter of urgency, speaks volumes on the

probability that the parties had not agreed upon their contract being subject to the

condition relied upon by the defendants and is far more consistent with Craig’s

allegation that although it had been discussed, it was not something that had to be

immediately attended to and could be dealt with in due course.



This becomes all the more probable when one bears in mind that R1 million was in

issue. Although Mark attempted to down play the necessity to obtain alternative

finance for his venture, it is not without significance that instead of being obliged to

find R1,8 million in order to pay for the farm at the end of July, he in fact only had to

put up a quarter of that figure by reason of the Lindhorsts and his brother’s

involvement.    And when the money was required to pay Kruse, Mark had no

reservation in calling upon Craig to pay the R 1 million, and personally received it

from him. If Mark was so keen to protect his vision that he required the agreement to

be subject to shareholders’ agreement reflecting that vision, why did he immediately

call for payment well knowing that no such agreement had been concluded? On his

version, both he and Craig would have been acutely aware at that stage that

payment was not due as no shareholders' agreement was in place, and it is most

unlikely that Mark, who professed to be so keen on ensuring that the shareholders’

agreement accurately reflected his vision, would be prepared to allow Craig into the
                                          24


scheme well knowing that the contract between them had not come into force as a

suspensive condition had not been fulfilled.



By the same token, it is also most unlikely that Craig would have parted with such a

sum well knowing that he was doing so in terms of an agreement which was

inchoate in the sense that it would then not have been binding as no shareholders’

agreement had been concluded. There does not seem to me to be much doubt that

Craig, knowing that a shareholders’ agreement had not been concluded, would not

have handed over R1 million if Mark had clearly spelled out to him that his obligation

to do so was conditional upon them having such an agreement. It would have been

absolutely foolish for him to have done so and, successful business man that he is,

he is not likely to have been so foolhardy as to have handed over that amount of

money knowing that he was not contractually bound to do so.



Accordingly, the mere fact that the payment was made, and accepted, within a few

weeks of the meeting at Seedplan and at a time when both sides were aware that no

shareholders’ agreement had been concluded, speaks loudly of the agreement not

having been subject to the suspensive condition relied on by the defendants.



Moreover, if the parties’ contractual relationship was conditional upon the existence

of a shareholders’ agreement, it is highly improbable that they would both have

allowed the conclusion of such an agreement to drift along as they did. It would

obviously have been of vital importance to both of them to have certainty on that

issue as soon as possible. Mark’s explanation that he wanted Craig to arrange to

the agreement in order to ensure that he had fully understood the vision as he had
                                           25


explained it to him, rings somewhat hollow. If he was as keen as he said he was on

ensuring that the agreement reflected his vision, one wonders why he did not

specifically instruct an attorney of his choice to ensure that the agreement spelled

out his vision. Not only did he not do so right at the outset, but he allowed things to

drift on for several years before he ultimately instructed Campos.



It is also significant that Mark did not tell attorney Ben Van Rensburg that the sale of

the shares was conditional upon a shareholders' agreement been concluded.

Similarly, attorney Anton van Rensburg was never informed that this was the case,

although it later became apparent to him that Mark considered there to be a

relationship between it and the transfer of shares. And in a letter Mark addressed to

Anton Van Rensburg on 4 December 2002, in which he stated that Craig had taken

responsibility for arranging a shareholders’ agreement, he made no mention of this

being a pre-condition to the enforceability of the agreement between the parties. If it

had been such a precondition, one would have expected this to have been clearly

drawn to the attention of these attorneys right at the outset.



The evidence of the accountant, Mr Cooper, who was called on the part of the

plaintiffs, is also extremely pertinent to this issue.     According to him, as was

confirmed in a hand written note which he had made, Mark spoke to him

telephonically on the 7 November 2000 and told him to effect transfer of the share

certificates to the Lindhorsts at a purchase price of R1 million but that he was not to

transfer Niels’ shareholding at that stage. Although the first defendant thereafter

countermanded this instruction, his initial instruction to transfer the shares is wholly

inconsistent with anything other than a binding agreement to do so and it is
                                           26


inconceivable that if the sale agreement had been subject to the alleged suspensive

condition and which he at all times knew had not been fulfilled, he would have issued

this instruction.



Not only are these factors inconsistent with the agreement being subject to a

suspensive condition, but Craig and Christopher both acted as shareholders and

were treated as such by Mark and Niels until discussions on the Campos drafts

broke down. Not only did they make regular and substantial financial contributions to

the third defendant, but they were given notice of and attended shareholders’

meetings and participated in the daily running of the company and its affairs. Craig

was also allowed to renovate the old dairy on the property and to effect certain

building improvements in order to move the offices of Kokwethu to the reserve. He

was also permitted to renovate and improve one of the boat houses on the property

for the use of Christopher, himself and their families. This was clearly done on the

basis that they were equal partners in the reserve. All of this is consistent with a

binding sale to them of the shares of the third defendant and inconsistent with such

sale being subject to a suspensive condition which had not been fulfilled. It is difficult

to comprehend that Mark would have allowed to Craig and Christopher to have

become so involved with the development of the reserve and treated them as

shareholders if he knew that they were not and that the purchase of their shares had

been subject to an unfulfilled suspensive condition.



It is also highly improbable that Craig would have been prepared to make the regular

financial contributions that he did make to the third defendant if he had been aware

that his purchase of its shares had been conditional and that he was not a
                                                  27


shareholder - which, on Mark's version would have been the case. And it appears

from Niel’s testimony that, by 2001, Craig was clearly concerned about his shares

not having been transferred to him, a reaction which is, in itself, indicative of a belief

on his part that there was no reason for his shares not be transferred.



The issue whether or not the agreement between the parties contained the

suspensive condition relied upon by Mark is one of fact which falls to be determined

from the evidence. In evaluating the evidence it is, of course, necessary to bear in

mind that a court must guard against making contracts for people or supplementing

an agreement merely because it would have been reasonable for the parties to have

contracted on particular terms.12 Instead the court must decide on what the parties

actually agreed. Accordingly, even if it would have been a reasonable precaution for

the parties to have contracted on the basis that their agreement was conditional

upon them concluding a shareholders’ agreement, that does not necessarily mean

that they contracted on that basis.



In addition, in evaluating the evidence and the probabilities, I must also bear in mind

that it is all too easy for a witness, particularly after the lapse of a substantial period

of time, to incorrectly reconstruct facts and events. Witnesses all to often testify that

they did reach agreement on something because it would have made sense to do

so, and therefore in their reconstruction of the events decide that they did do so. To

a certain extent, this is illustrated by the evidence of Niels who initially testified that

the agreement was conditional upon the conclusion of a valid shareholders'

agreement. However, when pressed, Niels testified that Mark never mentioned a

12
 See in this regard, albeit in the context of importing a tacit term into an agreement, Strydom v
Duvenhage NO en ‘n Ander 1998 (4) SA 1037 (SCA) at 1044 and the authorities there cited.
                                          28


shareholders’ agreement when he discussed his involvement in the scheme with him

and that, as they already had a partnership agreement, he understood that there

would be a shareholders’ agreement as “that is the nature of how I did business”.

The only discussion concerning a shareholders’ agreement that he was able to recall

was at a meeting at which Craig and Mark were also present held in September

1998, a few months after the Seedplan meeting. And, as he put it, the discussion

about the shareholders’ agreement merely related to who would prepare the

agreement as part of the setting up of the operation. The fact that Mark never

discussed a shareholders' agreement with him, nor mentioned that during his

discussions with Craig he had insisted upon the conclusion of such an agreement as

a condition to his involvement in the reserve, indicates on the probabilities that he

had not in fact laid down such a condition – possibly because he, like Niels, merely

assumed that would be how they would all do business.



Niels also testified that after he had seen them talking to each other at the Flying

Club, Mark had commented that Craig was "in". It was argued on the half of the

defendants that this remark corroborated Mark's statement that an agreement had

already been concluded by that time. While it does to a degree, the statement that a

person is "in“ is somewhat indefinite and may well connote no more than that the

person concerned is extremely interested in participation rather than definitely

committed thereto. What is of greater importance, to my mind, is Mark’s admission

that before the meeting at Seedplan, he had told Niels that things had changed and

that he had agreed to the Lindhorst family having a 50% shareholding in the venture

which, he said, was effectively going to be “of the age group, two brothers and two

brothers”. This is inconsistent with both his further statement that the trust would be
                                            29


representing the "greater Lindhorst family" and his allegation in the affidavit he

lodged in seeking an amendment to the plea, in which he stated that after numerous

attempts at finalising a shareholders' agreement, Craig advised him that he wished

to involve Christopher in the venture. However, it is consistent with Craig's allegation

that Mark had agreed during their discussions at Seedplan that he could bring his

brother into the venture with him.



Counsel for the defendants, in seeking to persuade me that their version was more

probable, placed considerable emphasis, understandably, upon the document

annexure P1 to the pleadings. While Mark recorded therein that Craig would

purchase once a shareholders' agreement was in place, that does not necessarily

mean that he proceeded to convey this to Craig. He did not make a copy available

to either Craig or Brian when they met with him, and he assumed that he had it on

the table at the time. In the light of these features, Mark may well not have conveyed

to them what he had noted earlier.          Certainly, neither he nor Craig thereafter

conducted themselves as if their agreement was subject to such a condition.



Not only are the probabilities then firmly in favour of the plaintiff’s version, but there

are a number of issues in respect of which Mark’s evidence was unsatisfactory.

Firstly, and importantly in the light of what follows, his evidence in regard to the entity

Craig was representing at the time he negotiated with him was both confused and

confusing. After the close of pleadings and pursuant to an extensive consultation

Mark held with his counsel and attorney, a substantial amendment to the defendants’

plea was sought introducing, inter alia, an allegation that the agreement concluded at

the Flying Club had been concluded not with the Craig Lindhorst Family Trust as had
                                          30


originally been pleaded but with the Lindhorst Family Trust.        In the answering

affidavit opposing such an amendment, it was pointed out that the Craig Lindhorst

Family Trust was a family trust of the Lindhorst family. In response thereto Mark

averred that Craig had, at the conclusion of the agreement and at all times prior

thereto, represented to him that he represented “a trust of the Lindhorst family” which

he also described as being “the greater family trust” as the contracting party. He

also suggested that he had used the terms “Craig Lindhorst Family Trust” and

“Lindhorst Family Trust” inter-changeably and stated that he had understood that the

two were one and the same being as the “greater” Lindhorst family trust. As regards

Christopher and his family trust, Mark stated that he had, in principle, been

amenable to Christopher becoming involved in the venture on the basis that

shareholding in a company would be held equally between the Andersen family on

the one hand and the Lindhorst family on the other.



However, in January 2003, when Mark instructed attorney Campos, he advised him

that Craig had told him that he would hold his interest in the Craig Lindhorst Family

Trust – which was consistent with the initial plea that the sale had been concluded

with that trust. When it came to testifying, Mark was confronted in cross examination

with what he had stated under oath in the affidavits in the amendment application

and was constrained to concede that, during their discussions at the Flying Club,

Craig had not told him that he was representing the family trust of the Lindhorst

family (as he had deposed). However, his stance in this regard vacillated as his

statement to that effect was irreconcilable with his other testimony to the effect that

Craig had indeed advised him that he would be contracting through his family trust

as well as his testimony that Craig had possibly mentioned his trust at the Flying
                                            31


Club or “might have mentioned that he would have put it into a company – I really

can’t recall the specifics of it, my impression is that it was an entity of Craig’s”. This

too is irreconcilable with his later statement that Craig never said at the Flying Club

that he was “going to hold this in my personal capacity or in a personal trust or in a

company I hold”. Later he stated that at that time he did not know that there was a

trust involved and that there was “no word trust or anything mentioned”, but almost

immediately thereafter stated that, while he did not recall Craig using the word “trust”

it was possible that he had said that he would be “…putting it into a trust, because I

do remember him at some stage saying obviously I’ll be putting it into a trust”.

Despite his earlier denial of Craig mentioning a trust, Mark ultimately conceded that it

was possible Craig had stated that he was participating through his family trust.



In the light of all this, there is considerable merit in the argument of plaintiff’s counsel

that Mark’s evidence on the question of what Craig had told him at the Flying Club

meeting in regard to him representing a family trust was, as he put it, “somewhat

akin to a lucky packet in that one can take one’s pick”.



Mark’s evidence was also unsatisfactory in regard to the alleged meeting he had with

Craig at Kwelera 23 June 1998. Initially, when Craig was cross-examined, counsel

for the defendant suggested to him that he may have met with Mark at Whats

Landing on that day, a suggestion that was met with a firm negative response. It

was only after an adjournment when instructions were taken that it was suggested to

Craig that he had in fact landed at Kwelera near the farm house on the reserve.

Craig’s response was that he had merely taken his father for a half hour flip over the

reserve, and it was not suggested to him at that time Mark was not referring to that
                                           32


flight but to a flight in which Craig had come from Transkei to land at Kwelera.

However, when Mark testified, he was able to recall that Craig had landed after flying

from Transkei and that, while at Kwelera, they had discussed his participation in the

venture and agreed to shareholding to be split equally between the two families, and

that after this meeting Craig had left him with the distinct impression that he was

going to arrange to meet with his father. However, his certainty as to Craig arriving

by air from Transkei for the meeting on 23 July subsequently dissipated as, under

further cross-examination, it appeared that he was uncertain of whether Craig had in

fact arrived by air or in a light delivery vehicle and only stated that it had been by

helicopter as Craig’s logbook referred to a flight to Kwelera that day.



Moreover, and most importantly, the fact that there was a meeting between Mark

and Craig on the reserve on 23 June 1998 at which certain of the essentials of the

contract were redefined and agreed upon, was never part of the defendants’ case on

the pleadings.     When this was put to him, Mark responded that his legal

representatives had displayed a “lack of acceptance” of this issue and that he had

always been uncomfortable with the pleadings in that regard. However, if it had

always clearly been his case that during this meeting the terms of the contract earlier

agreed at the Flying Club had been substantially amended and finally agreed, there

is no reason to think this would not be not reflected in the pleadings – particularly as

reference was made in the pleadings to the meeting at Seedplan which, according to

Mark, took place well after a final agreement had already been reached. In these

circumstances, if Mark's description of the events which occurred at the reserve on

23 June was not a figment of his imagination or an erroneous reconstruction but

something of which he had it all times been aware, it is almost inexplicable that
                                           33


reference thereto was not made in the pleadings and the inference is almost

irresistible that this was something he had thought of later.



I do not think it is necessary to subject Mark’s evidence or the defendants’ version to

any further analysis for present purposes (one could go on and on). Bearing all of the

above in mind, I am of the view that Mark’s evidence as to the terms of the

agreement that was concluded is riddled with improbabilities and inconsistencies.

Whether this is as a result of a bona fide but inaccurate reconstruction or some other

reason, I need not decide. Suffice it to say that I find Craig's evidence to be far more

convincing and probable, and have therefore concluded that the plaintiffs have

established, on a balance of probabilities, that Craig, acting on behalf of his trust,

concluded the simple and uncomplicated agreement he averred in which he

purchased 50% of the shareholding in the third defendant against payment of the

sum of R1 million, and that the sale was neither subject to a suspensive condition

that a shareholders' agreement to be concluded nor contained all the detailed terms

alleged by the defendants. I find further that when the agreement was concluded,

Mark was agreeable to Craig disposing of one half of his trust's shareholding to his

brother, Christopher.



Accordingly, I have concluded that the parties contacted on the terms relied upon by

the plaintiffs and that the lack of a shareholders’ agreement does not render the sale

of the shares to them unenforceable. This conclusion renders it unnecessary to deal

with many of the further issues that were raised on the pleadings although I think it is

necessary at this stage to deal, with the plea that the contracting party was in fact
                                           34


the Lindhorst Family Trust, the effect of this contention being that the plaintiffs’ lack

locus standi to enforce the sale.



I have already referred to Mark’s somewhat confused evidence in regard to this

issue, but it is clear from his own testimony that the personality with whom he was

prepared to contract was Craig and that it did not matter to him what vehicle Craig

used for purposes of their venture. Also importantly, he conceded that, on the day

they reached agreement, Craig may have indicated that his participation in the

venture would be through his family trust.      Importantly, under cross-examination

when it was put to him that the entities involved in the shareholding were not critical

in putting together the deal which was dependent upon the investment and the

payment of the purchase price, Mark’s response was that it was the identity of those

who the entities represented that was crucial, not the entities themselves.

Importantly, the persons he was prepared to deal with were Craig and, later, when

Craig wanted to bring his younger brother into the venture, Christopher as well.



At that stage, due to financial advice they had been given, the Lindhorsts as a family

were restructuring their financial affairs which resulted in the creation of the Craig

Richard Lindhorst Family Trust and the Christopher Basil Lindhorst Family Trust,

both of which had a shareholding in Kokwethu through which Craig and Christopher

conducted their business interests. In these circumstances, the probabilities are

overwhelming that they would use their trusts as vehicles for the acquisition of their

shareholding in the reserve, particularly as the funds which were used to purchase

such shareholding came out of their loan accounts in Kokwethu There was also no

reason for the Lindhorst Family Trust, the beneficiary of whom was their father,
                                              35


Brian, to have been involved as he at no stage expressed any interest in personal

involvement and had merely enjoyed the opportunity of visiting and briefly looking at

the property before the meeting at Seedplan on 30 June 1998. And although Mark

stated that he understood the trust would represent the “greater Lindhorst family” as

he understood it when agreement was reached, that is hardly probably in the light of

the fact that appears to have been common cause that Craig had asked Brian

whether he wanted to be involved to which he replied in the negative, and at no

stage during the discussions that were held at Seedplan did Brian indicate to Mark

that he wanted to be involved. Moreover, if the original agreement had been an

entity involving the “greater Lindhorst family” why would Craig subsequently have

asked Mark if Christopher could be involved? He would already have been involved

through the trust representing the greater Lindhorst family.



In the light of this, I have concluded that there is no merit in the defendants’

contentions that the contract was concluded by the Lindhorst Family Trust and that

the plaintiff's lack locus standi to enforce it.



A further issue to which I now turn it is a special plea of prescription, the defendants

contending in their plea that the claim for transfer of the shares had prescribed as

summons was issued more than three years after the purchase price for the shares

had been paid in 1998. While in the witness box, Mark stated that he did not want to

win the case on the point of prescription, but his munificence in this regard did not

cause him to abandon his plea of prescription. Instead, although the plea if upheld

would mean that the Lindhorsts would have paid R1 million for shares they could not

receive, he stated that he did not want their money and offered to pay the price he
                                                 36


received for the shares to charity. What must now be considered is whether any

such charity will benefit.



Extinctive prescription commences to run under s 12 (1) of the Prescription Act, 1969

as soon as a ”debt" is “due”. As the term ”debt” is not defined in the Act, it has

persistently being held that it must be given a wide and general meaning and

includes an obligation to do something, whether by making payment or by effecting

delivery of goods and services. For present purposes I intend to accept, but without

deciding, that it would include an obligation to effect transfer of a share certificate in

a company.



There is of course a vital difference between the existence of a debt and it being

recoverable, and prescription begins to run, not necessarily when a debt arises, but

only when it is due i.e. when it is immediately claimable by the creditor in legal

proceedings. This implies an obligation on the part of the debtor to immediately

perform.13 As it is trite that the party who raises prescription as defence must prove

the date of the inception of the period of prescription, the defendants’ were therefore

obliged to show when the debt (the obligation to perform) fell due.                    Relying on

various authorities14 and upon the fact that none of the parties had ever alleged that

it had been agreed that the shares were to be transferred by a specific date, counsel

for the plaintiffs argued that the debt could only have become due within a

reasonable time of the first and second plaintiffs, as trustees of Daneswold, being

placed in mora by way of demand. He also argued that the earliest communication


13
  Uitenhage Municipality v Molloy 1998 (2) SA 735 (SCA).
14
  Including Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1977 (4) SA 310 (T)
                                                                                    th
at 347, Nel v Cloete 1972 (2) SA 150 (A) at 177 and Christie The Law of Contract (4 edition) at 582-
583
                                                 37


relating to the transfer of shares is contained in certain correspondence which took

place in about October 200015 which, so the argument went, would be the earliest

that mora would arise and prescription could begin to run. Summons was issued less

than three years later in April 2003.             The plaintiff’s argument therefore is that

summons was issued well before three years had elapsed from the time the

defendants were placed in mora.



There is considerable merit in this argument. However, even if one assumes for

present purposes that the obligation to transfer the shares became due and

recoverable upon payment of the R1 million in mid-1998 as the defendants contend,

there seems to me to be a further reason why, clearly, the defence of prescription

cannot be upheld. Sections 14(1) and (2) of the Prescription Act No. 68 of 1969

provide as follows:



       (1) The running of prescription shall be interrupted by an express or tacit
           acknowledgement of liability by the debtor.
       (2) If the running of prescription is interrupted as contemplated in subsection (1),
           prescription shall commence to run afresh from the day on which the interruption
           takes place or, if at the time of the interruption or at any time thereafter the parties
           postpone the due date of the debt from the date upon which the debt again becomes
           due.



It is necessary to bear in mind that a share certificate merely proves to the outside

world the identity of the owner of the shareholder. As I have mentioned above, after

the price of R1 million had been paid, Craig and Chris Lindhorst (or more properly,

their respective trusts) were recognised as being shareholders in the reserve in

whose affairs they participated in the day to day running and administration. There

can be no more cogent tacit acknowledgment of the liability to transfer a person his

share certificate than to allow such person to act as a shareholder and member of a

15
     Exhibit A 287, 288, 310, 324, 419 & 425.
                                                     38


company. It was only when the negotiations involving Campos broke down in May

2002 that Craig and Chris were treated as if they were not in fact shareholders and,

in my view, it was only at that stage that prescription commenced to run afresh under

s14(2). There can therefore be no question of a claim having prescribed when

summons was issued in April 2003. Accordingly, in my view, (and unfortunately for

charity) the special plea of prescription must be dismissed.



A final objection raised by the defendants to the plaintiffs' entitlement to the relief

sought is based on the submission that although a court will, as far as possible, give

effect to a plaintiff's case to specific performance, it has a discretion in that regard

and may, in a fitting case, refuse to grant such an order but leave it to the plaintiff to

claim damages. It was submitted on behalf of the defendants that while they bore

the onus of proving facts on which the court can and should exercise its discretion in

their favour by refusing specific performance16, they had discharged that onus

particularly as a deadlock situation will immediately result between the shareholders

of the third defendant which would lead to its liquidation. This contention was based

upon the suggestion that, by reason of a number of factors, the shareholders viz

Mark, Niels, Craig and Christopher, will be unable to work effectively together in the

management of the affairs of the third defendant.



The factors to which the defendants refer include Craig's lack of trust in Mark (as

shown, inter alia, by his suggestion that annexure P1 was possibly fabricated), their

previous involvement in acrimonious spoliation and arbitration proceedings arising

out of the dissolution of a partnership relating to an aeroplane, the fact that there had


16
     See e.g. Tamarillo (Pty) Ltd v B N Aitken (Pty) Ltd 1982 (1) SA 398 (A).
                                           39


been a physical fracas between them and a serious altercation between Mark and

Craig's father, Brian, as well as Craig's alleged attempts to undermine Mark in the

eyes of his brother, Niels, and the fact that Craig had insisted that the shares should

be kept in trust pending the outcome of these proceedings.            In addition, Mark

believes that Craig only pays lip service to his vision for the reserve and that there is,

in truth, absolutely no love lost between them at present.



All these factors are indeed relevant to the exercise of my discretion in regard to the

question of specific performance. But there are a number of other factors which are

to be taken into account. Firstly, I cannot lose sight of the fact that there are four

shareholders in this enterprise, not just Mark and Craig. And while it may be that

Niels testified that he, too, has lost faith in Craig as a result of something which

happened during the course of attempted settlement negotiations, there seems to be

no doubt that the relationship between the two of them is less fraught with difficulties

than that which exists between Craig and Mark. And while it is understandable that

the relationship between the different factions has been strained during this litigation,

finality in regard to these proceedings may well alleviate the position remarkably. It

is also not without significance that the parties were not too far apart in reaching

consensus on a shareholders’ agreement which, if concluded, will alleviate future

problems in regard to the use of the reserve. I am sure all parties would prefer to

reach consensus in that regard rather than to undergo yet another court case. And it

is also significant that the two Lindhorst brothers as well as Mark and Niels are all

members of Koala Bare resident at Whats Landing, and have been able to remain so

despite their personal difficulties.
                                            40


It also seems to me to be relevant to bear in mind that to refuse specific performance

will result in Christopher, against whom neither Andersen holds reproach, being

denied his entitlement to participate in the reserve in respect of which he had paid

his share, and it would be inherently unjust to him to refuse specific performance and

to oblige him to attempt to prove damages, something which may be a difficult,

expensive and difficult task.     If there is a dispute as to the running of the third

defendant, it is also by no means certain that Christopher will automatically side with

his brother and I certainly cannot find that the management of the third defendant’s

affairs will end up in deadlock and will lead inevitably to it being wound up.



In addition, the exercise of the discretion in regard to a specific performance must be

considered bearing in mind that the plaintiffs purchased shares in a property owning

company which has, as its most valuable asset, a prime and incomparable stretch of

river bushveld and river frontage possessed of immense development potential. Not

only have plaintiffs performed in full and paid for half of the shares in the third

defendant as long ago as July 1998, they have since then both financed the

defendant and assisted in the management and early development of the reserve.

They have contributed 50% of the purchase price of the land, have purchased half of

the share in the third defendant and have, in addition, paid a significant premium to

Mark for his efforts in the initiation of the venture and for transfer of the shares. All of

this would render it inherently unfair to the plaintiffs to exclude them from the further

development of the venture. In addition, damages would be extremely difficult to

quantify and, as it cannot be said that performance by the defendants is impossible,

the immense development potential of the land and the life style benefits associated

with a shareholding in the third defendant, operates strongly in favour of on order of
                                               41


specific performance.17 In addition, a plaintiff ordinarily has the right to elect whether

to demand performance or sue for damages, and the courts will as far as possible

give effect to this election.18



Bearing these principles and the facts that I have set out above, I have decided to

exercise my discretion in favour of ordering specific performance and directing the

defendants to transfer the shares that were sold.



The final issue to consider is whether the order should direct transfer of the 50%

shareholding in the third defendant to the Craig Richard Lindhorst Family Trust or

whether 25% of the shareholding should be transferred to that trust with the

remaining 25% to be transferred to the Christopher Basil Lindhorst Family Trust.

Counsel for the plaintiffs did not mind which of these options I exercised and

informed me that, between Christopher and Craig, there was consensus that even if

the order was made solely in favour of the Craig Richard Lindhorst Family Trust, it

would transfer half of those shares to Christopher’s trust.



Although, strictly speaking, Craig represented his trust in concluding the purchase

the shareholding, on his version (which I have accepted) Mark had no objection to

him splitting that shareholding with Christopher and, in truth, the shares were paid for

by them both. As I have said, Mark mentioned to Niels right at the outset that it

would be the two Andersen brothers and the two Lindhorst brothers involved in the

17
   Compare Esterhuizen v East Rand Crusher Ltd 1968 (4) SA 281 (T) and Swarts & Son (Pty) Ltd v
Wolmaransstad Town Council 1960 (2) SA 1(T).
18
   Benson v SA Mutual Life Assurance Society 1986 (1) SA 776 (A) at 782H.
                                                     42


development. And even on his own version, Mark had no objection to Christopher’s

involvement once he became aware that Craig had introduced him into the venture,

and thereafter treated him as an equal shareholder. In these circumstances, one

can regard the sale of the shares as having been varied to the extent that the

purchasing parties were in fact Mark and Christopher, each representing his own

trust. I have therefore decided that the defendants should be ordered to transfer

25% of the shareholding in the third defendant to Craig's trust and a further 25% to

Christopher's trust.



There is no reason why the costs should not follow the event. There is no reason to

burden the third defendant19 with the costs as it is its shareholding which is at stake.

Accordingly, the costs order should issue against the first and second defendants

who are sued in their capacities as trustees of the Daneswold Holding Trust, the

holder of the shares in the third defendant, who have refused to make 50% of the

shareholding over to the plaintiffs.



It was argued on behalf of the plaintiffs that I should grant the costs order on the

scale as between attorney and client, particularly in the light of the trial having been

extensively prolonged in the pursuit of spurious defences (some belatedly

introduced, some abandoned after days of evidence, others clearly untenable on the

available evidence) and as Craig was subjected in cross examination to unjustified

and unjustifiable slander quite irrelevant to the issues between the parties. However

litigation is at times a hard game, and although I have found against the defendants,




19
     The party cited as the fourth defendant is the original name of the third defendant.
                                            43


this does not appear to me to be a matter in which the conduct of the defence was

such that I should visit them with a punitive costs order.



Also reserved for my decision at this stage were the costs of an opposed application

by the plaintiffs for an amendment to their pleadings (I granted the amendment on 6

April 2006 but reserved the question of costs). The hearing of the application was

but one of many interruptions and delays that took place during the course of the

trial. The defendants’ objection to the amendment was based substantially on the

fact that the issue of waiver which was raised in the amendment had not been

specifically canvassed with Niels when he had testified.        The amendment was,

however, granted and, in due course, only the first defendant, Mark, was recalled. In

these circumstances I think it is fair to treat the time spent on the opposed

amendment as being part and parcel of the trial itself, and I therefore direct that the

costs of the opposed application for an amendment allowed by me on 6 April 2006

are to be costs in the cause.



As special items of cost, the plaintiff further asked for the qualifying expenses of its

expert witnesses, Gouws and Bester, the costs of a pre-trial inspection in loco of the

reserve attended by counsel, the costs of those photographs the plaintiffs had

provided, the declaration of the first and second plaintiffs as necessary witnesses,

and the costs of two counsel. I did not understand counsel for the defendants,

correctly in my view, to dispute the issue of the special orders in the event of the

plaintiffs succeeding in their claim.



The following order will therefore issue:
                                        44




1. The first, second and third defendants are hereby ordered to forthwith

    transfer or cause to be transferred 25% of the shares in the third defendant to

    the Craig Richard Lindhorst Family Trust and a further 25% of the shares in

    the third defendant to the Christopher Basil Lindhorst Family Trust.

2. In the event of the first, second and third defendants failing to comply with

    paragraph 1 above within seven days of this order, the Sheriff of the High

    Court of South Africa for East London is hereby authorized to sign all

    documentation and to take all necessary steps to effect transfer of the above

    shareholding to the aforementioned trusts.

3. That the first and second defendants, jointly and severely, the one paying the

    other to be absolved, are ordered to pay the plaintiffs’ costs of suit, together

    with interest thereon calculated at the legal rate from a date fourteen days

    after allocatur to date of payment. Such costs are to include:

        (a) the qualifying expenses of the witnesses Gouws and Bester;

        (b) the costs of one pre-trial inspection in loco at the Kwelera

            Nature Reserve attended by counsel;

        (c) the costs of the plaintiffs’ photographs;

        (d) the costs of two counsel.



4. The costs of the plaintiffs’ opposed application for an amendment granted on

    6 April 2006 are to be costs in the cause.

5. The first and second plaintiffs are declared to have been necessary

    witnesses.
                              45




___________________________

L.E. LEACH

JUDGE OF THE HIGH COURT

				
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