The next time you find yourself sipping cocktails by the pool at Cape Town’s Commodore Hotel or admiring a crimson-breasted gonolek at Pilanesberg’s Kwa Maritane, spare a thought for the owners—of the hotels, not of the crimson-breasted gonolek—and their long, messy breakup. Legacy Hotels has three deadlocked shareholders. One of them, Ensemble, applied for relief under section 163 of the Companies Act. Ensemble, as it happens, is owned by Libya’s sovereign wealth fund. Libya’s sovereign wealth fund is subject to international sanctions, making it…difficult…to sell its shares. Ensemble instead asks for a forced sale of Legacy Hotels’ business (presumably not including any crimson-breasted gonoleks). The other shareholders ask for a buyback of Ensemble’s shares. Gauteng Division, Johannesburg: all of Legacy Hotels’ shares must be auctioned between the three shareholders (the actual rules of Monopoly, if your household ever bothered to read the rules). Everyone: wait, no one asked for that. SCA: sanctions freezes Ensemble’s shares, so the auction is a no-go. Sanctions also means that selling the business won’t do because any proceeds of the sale can’t flow to Ensemble. A buyback of Ensemble’s shares runs into the same problem, but at least there’ll be a clean breakup at an independent valuation so Legacy Hotels can go back to pouring cocktails and finding crimson-breasted gonoleks. But the buyback is subject to the Minister of Finance’s blessing under the sanctions regime (don’t ask what happens if the Minister of Finance says no).

In other breakup news, Clear Access and Lasernet formed a joint venture for fibre internet in Knysna. Like any good breakup, Clear Access and Lasernet can’t even agree how they broke up: Clear Access says it cancelled the JV agreement because Lasernet breached its funding obligations under the JV agreement; Lasernet says they agreed to part ways. After a referral to oral evidence, Gauteng Division, Johannesburg finds that the parties orally agreed to terminate the JV agreement, and that a non-variation clause in the JV agreement did not stand in the way (top tip for contract drafters: include termination or cancellation in your Shifren straightjackets!). So this time, the breakup really was mutual.

In more breakup news, Priestman, a director of asset manager Fibonacci, tries to get the board to remove two directors. Rest of the board: you don’t have the votes (that’s a Hamilton joke). Priestman reviews the board’s decision under s.71 of the Companies Act. Meanwhile, the board removes Priestman (lesson in that: if you come at the king, you best not miss). Gauteng Division, Johannesburg: s.71 is a limited review, not an appeal, and Priestman’s complaints have no merit.

Civil procedure pop quiz! Plaintiff sends a notice of bar after defendant fails to plead on time. Defendant applies for default judgment. Defendant says the notice of bar was not properly served and that he wasn’t given the required five days’ notice of default judgment. So defendant sends a Rule 30A notice, arguing that the notice of bar and the default judgment applications are irregular steps. Plaintiff withdraws the default judgment application and sends a fresh one, giving the required notice (silly games, silly prizes). That too is irregular, argues defendant, because now there’s no opportunity to apply to set aside the notice of bar as an irregular step. Gauteng Division, Johannesburg: that’s not how any of that works.

Consumer buys a second-hand car from a dealer. It’s a lemon. Consumer: take it back and refund me. Dealer: no, I get to try more repairs. Western Cape Division, Cape Town: no, you don’t (and punitive costs against you for putting this consumer through the wringer).

Prescription pop quiz! Builder finishes building a house in September 2016. Homeowner notices cracks within weeks of moving in. Builder tries repairs in January 2017. Homeowner reports another crack in December 2017, and an engineer confirms major structural defects in January 2018. By October 2018, it becomes clear that the builder cannot repair the defects. After a few years of back and forth, homeowner sues in January 2021. Builder: claim has prescribed. Northwest Division, Mahikeng: no it hasn’t. Full Court: yes it has (editorial aside: stop calling three judges a full bench). SCA: no it hasn’t, because the homeowner sues on breach of a statutory warranty under the Housing Consumers Protection Measures Act, which affords the builder an opportunity to rectify defects, so the statutory warranty is breached only when the builder fails or refuses to rectify the defects—and the homeowner only knew that the builder’s attempts would be futile in October 2018. (Alert readers will wonder what happens if a homeowner wants a refund instead of a repair under the Consumer Protection Act: the Housing Consumer Protection Measures Act (soon to be replaced by the new and improved Housing Consumer Protection Act) is the more specific statute, but section 2(9) of the Consumer Protection Act says that if there’s inconsistency between it and another statute, “the provision that extends the greater protection to a consumer prevails over the alternative provision”).

And news from England: as always, the best stuff on damages comes from cases about ships. As a general (if now doubted) rule, a contracting party has a claim for damages for loss of profit (or loss of bargain damages—but see para 20) only if the party cancels for repudiatory breach (which, in English law, means a breach that entitles an innocent party to cancel—not only, like in South African law, an anticipatory renunciation of the contract: under English law, a right to cancel arises if the term that is breached is a condition, if the breach of an innominate term is sufficiently serious, or if there is, in the South African sense, repudiation). If a party does not cancel for repudiatory breach but exercises a contractual right to terminate, then there is no claim for loss of bargain damages. Here, buyer buys a second-hand ship on a standard-form contract. Seller does not send a notice of readiness on time, so buyer exercises a contractual right to terminate without relying on a repudiatory breach. Supreme Court: there are probably reasons to doubt the repudiatory-breach rule, but we need not wade into those deep waters now because, unlike other ‘bare’ termination clauses, the termination clause that the buyer relied on gives the buyer a right to “due compensation … for their loss”, which, properly interpreted, includes loss of bargain damages. So it does not matter that there was no cancellation for repudiatory breach.