Klub Lekkerrus/Libertas v Troye Villa (Pty) Ltd and Others

Two voluntary associations, Klub Lekkerrus and Klub Libertas, operated holiday resorts and in 1990 each concluded agreements to purchase all issued shares and loan accounts in two property-owning companies from Mr P J H van Tonder. In 1991 the two clubs unanimously amalgamated into a new voluntary association, Klub Lekkerrus/Libertas (the Club), which thereafter continued operating the resorts. Although the purchase prices were not fully paid within the stipulated 60 months, Mr van Tonder never cancelled the agreements and continued to accept payments, later granting an indefinite extension. After his death in 1997, disputes arose regarding whether the amalgamation had terminated the original share sale agreements, whether the non-variation clauses prevented substitution of the Club, and whether ownership of the shares vested in the Club or in Mr van Tonder’s estate or Troye Villa (a company controlled by his widow). The High Court found for the plaintiffs, but the Club appealed.

The appeal was upheld with costs. The High Court order was set aside and substituted with an order declaring that the Club was the sole shareholder of all issued shares in the second and third plaintiffs and that the share registers be rectified accordingly. The plaintiffs’ remaining claims and counterclaims were dismissed, and appropriate costs orders were made.

The case is important for South African contract and association law as it clarifies the legal effect of the amalgamation of voluntary associations, confirms that tacit agreements may arise notwithstanding non-variation clauses, and reaffirms the doctrine of election in cases of breach. It underscores that courts must look to the parties’ conduct to determine succession and contractual continuity.