Union Free State Mining and Finance Corporation Ltd v Union Free State Gold and Diamond Corporation Ltd

• Jurisdiction: South Africa
• Judge: Munnik AJ
• Judgment Date: 17 August 1960
• Hearing Date: 16 August 1960
• Court: Witwatersrand Local Division

G Munnik, A.J.:

This is an application for leave to amend pleadings in terms of a notice dated the 1st of August, 1960. For the sake of convenience I shall refer to the applicant and the respondent herein as the defendant and the plaintiff respectively. The plaintiff instituted action against the defendant for an order declaring that the plaintiff is entitled to a participation to the extent of 10 per cent of all benefits derived and to be derived by the defendant from the turning H into account of certain option and prospecting contracts over certain farms in the district of Randfontein and other ancillary relief following upon such declaration.

The plaintiff based its cause of action upon a verbal agreement alleged to have been entered into between the parties in 1948 in terms whereof the rights now claimed were conferred upon the plaintiff. The

Munnik AJ

agreement and its terms are set out in paras. 3 and 4 of the declaration. In the declaration filed originally the date of this agreement was alleged to be during or about August, 1948, but notice of intention to amend the date at the trial to 'on or shortly before the 2nd of July, 1948' has been given and the defendant's notice of A amendment to its plea which forms the subject matter of the present application was drawn on the basis of the amendment being considered as having been granted. The defendant pleaded several defences, several alternative defences to the plaintiff's claim and now seeks to amend its plea by the addition of a further alternative defence in the following terms, and I quote from the notice of amendment:

'2bis

B Alternatively to paras. 2 (b), (c) and (d) hereof and in the event only of it being held that the defendant concluded a valid and binding contract with the plaintiff as alleged in paras. 3 and 4 of the declaration (which is still denied) the defendant says:

A.

On a date which is unknown to the defendant but which was prior to the 2nd November, 1949, alternatively prior to 22nd November, 1949, the C plaintiff waived, or alternatively, abandoned all its claims against the defendant arising out of the alleged contract, or alternatively the plaintiff released the defendant from its obligations to the plaintiff under the alleged contract.

B.

The defendant is unable to furnish any further particulars of the waiver, abandonment or release referred to in sub-para. A hereof, as none of its present directors was a director of the defendant at the time thereof, and no witness having knowledge of the details of the said D waiver, abandonment or release is presently available to the defendant.

The defendant will rely, in proof of the allegation contained in sub-para. A hereof, upon the facts set out in sub-para. C hereof.

C. (a)

On the 2nd of November, 1949, and at Johannesburg, an agreement was concluded between Fresrand Investment Co. (Pty.) Ltd. (hereinafter referred to as 'the purchaser') on the one hand, and the following persons, on the other hand:

(i)

E Joel Michael Milne and the plaintiff (who were referred to in the said agreement as 'the sellers')

(ii)

Joseph Milne.

(b)

In terms of the said agreement, the plaintiff and the said Joel Michael Milne sold to the purchaser respectively 760,000 and 240,000 fully paid up ordinary shares in the defendant company.

(c) (i)

In terms of the said agreement the plaintiff, the said Joel F Michael Milne and the said Joseph Milne jointly and severally warranted inter alia that copies of the balance sheets and profit and loss accounts of the defendant in respect of the year ended 30th day of June, 1949, which had been handed to the purchaser, and the audited balance sheets and profit and loss accounts of the other scheduled companies as at the 30th day of June, 1948, were true and accurate and that on the G 22nd day of November, 1949, all the scheduled companies would have no liabilities - whether ascertained or contingent - other than those shown in its books of account as at the date of the said agreement.

(ii)

'The scheduled companies' were defined in the said agreement as the companies set out in a schedule to the said agreement, of which the defendant was one.

(iii)

The books of account of the defendant at no time showed that the H defendant had a liability whether ascertained or contingent in respect of any contract such as that alleged in paras. 3 and 4 of the declaration nor was any such liability reflected or referred to in or on the copy of the defendant's balance sheet referred to in sub-para. (c) (i) hereof.

(d)

Further in terms of the...