Kaizer Chiefs team manager Bobby Motaung has been slapped with a R3.4-million lawsuit by a property company after he allegedly signed an agreement of sale to sell his shopping complex to it without disclosing that the commercial property owed creditors and SA Revenue Service (Sars) millions of rands.
As a result, the property company, GRC Property Investment, ended up paying more than the sale price of the property.
It has also inherited the debt of Motaung’s company with Sars, which is in the
north R700 000. In the court papers filed in the Johanessburg High Court last week, GRC said it entered into an agreement with Motaung’s company, Lakeshore, to purchase a shopping complex in Ormonde, southern Joburg, for R9.5-million.
GRC said when the written agreement of sale was signed, Motaung failed to disclose that he had signed an agreement authorising another company, Pent up Investment, to register a bond over the complex as security. Lakeshore had failed to repay a loan of over R7-million it obtained from Pent Up Investment.
The agreement between Lakeshore and Pent Up, said GRC, was later made an order of court on August 30 2011. As a result, Lakeshore could not sell and pass registration of the transfer of the complex into GRC’s name.
“Lakeshore was also indebted to the City of Johannesburg, and (due to) absent payment of the rates clearance figures payable to the City of Johannesburg, the property could not be transferred to the plaintiff,” read the papers.
GRC further said on July 21, 2017, the Johannesburg High Court placed Lakeshore under final winding up and its estate was placed in the hands of the master of the high court.
On November 17, 2021, the liquidators repudiated the agreement for the sale of the property to GRC.
“On March 10, 2022, at Bryanston, the plaintiff entered into a written cession agreement with Pent Up Investments cc in terms of which the plaintiff acquired the claim of Pent Up Investments cc against Lakeshore.”
GRC said in consideration for the cession, it paid Pent Up Investments the sum of R1.5 million and an additional R50,000 for its legal costs.
In April 2022, GRC acquired Motaung’s shares in the company and agreed to procure the complex upon Lakeshore being discharged from liquidation.
On April 11, 2022, GRC paid the liquidator’s fee of R934 900, and Lakeshore was discharged from liquidation.
“In so acquiring the property, the plaintiff had to pay R9, 500 000.00 and R2 484 900.46.
“The plaintiff accordingly paid R2, 484 900.46 more than the plaintiff would have had to pay to acquire the property had Lakeshore been able to pass the transfer,” read the papers.
“The R2.4-million consists ofR1. 5-million in respect of the acquisition of the claim of Pent UpInvestm ents, R50 000 for its legal costs and R934 900 paid to the liquidators for their fees and disbursements.”
GRC also said at the time of acquiring the shares in Lakeshore, the entity was indebted to Sars for R574, 802.24 in respect of Lakeshores income xax liability. Lakeshore was further indebted to Sars for R204 636.61 in respect of Lakeshore’s VAT liability.
“As a result, the plaintiff purchased shares in an entity that is indebted to Sars in an amount of R779 438.85 (R574 802.24 plus R204 636.61). As a result, the plaintiff suffered
further damages in the amount of R779 438.85.
“In the premises, the defendant is indebted to the plaintiff in the amount of R3 264 339.31 (R2 484 900.46 plus R779 438.85), which amount is due, owing and payable.”
Despite demand, Motaung has refused to remit payment. When concluding the agreement of sale, GRC said Motaung knew or ought to have known that Lakeshore could not pass registration of transfer of the property into its name. “The defendant accordingly misrepresented, by his silence, the true facts to the plaintiff.
“The aforesaid misrepresentations were material to the conclusion of the agreement of sale. Had the facts been disclosed to the plaintiff, the plaintiff would not have purchased the property.
“The plaintiff was accordingly induced into entering into the agreement of sales,” read the papers. “The defendant’s conduct was wrongful and caused the plaintiff’s patrimonial loss.”
