Comwezi Security Services (Pty) Ltd and Another v Cape Empowerment Trust Ltd

Comwezi Security Services (Pty) Ltd borrowed R4 million from Cape Empowerment Trust Ltd (CET), secured by a cession and pledge of shares. After Comwezi failed to repay, the parties concluded a settlement agreement under which the loan would be discharged by issuing shares to CET, subject to CET conducting a due diligence investigation within a specified period. Comwezi and the Grapsy Trust undertook to cooperate fully with the investigation. CET repeatedly extended the time period for due diligence due to Comwezi’s failure to cooperate. Comwezi refused to provide documentation and assistance, asserting that the settlement agreement had lapsed. CET obtained a court order compelling cooperation, which Comwezi appealed unsuccessfully. Thereafter, Comwezi claimed the agreement had lapsed because CET had not extended the due diligence period further. CET sought declaratory relief confirming the agreement’s continued validity and enforcing compliance.

The appeal was dismissed with costs, including the costs of two counsel. The time period in the High Court order was construed to run from the date of the SCA judgment.

The case clarifies South African law on repudiation and its effect on reciprocal contractual obligations, confirming that a repudiating party cannot rely on its own breach to escape liability or benefit from contractual provisions. It reinforces principles preventing a party from profiting from its own wrongful conduct.