Zephan (Pty) Ltd and Others v De Lange

The respondent, Mrs Anne-Marie De Lange, invested in Highveld Syndication No 21 Ltd by purchasing 1 000 shares pursuant to an investment agreement governed by a registered prospectus. The investment structure included a buy-back agreement concluded between Highveld Syndication No 21 Ltd, Zephan (Pty) Ltd, the N Georgiou Trust and Mr Nicolas Georgiou, in terms of which the latter parties undertook jointly and severally to repurchase investors’ shares five years after the investment date. When the five-year period expired, the appellants failed to repurchase Mrs De Lange’s shares. She instituted action for performance and applied for summary judgment. The appellants opposed summary judgment, contending that no contractual nexus existed between them and Mrs De Lange, that the buy-back agreement was unenforceable as a stipulatio alteri, and that the agreement had been superseded by the business rescue plan of the Highveld Syndication companies.

The appeal was dismissed with costs, including the costs of two counsel where applicable.

The case confirms the strict requirements for opposing summary judgment and reiterates that a defendant must disclose factual grounds for a bona fide defence, not merely legal argument. It provides authoritative clarification on the enforceability of stipulatio alteri agreements in investment schemes and affirms that business rescue proceedings of one contracting party do not affect independent contractual obligations of third parties once a benefit has been accepted.