THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 845/2020
In the matter between:
RAJKUMAR TAHILRAM

APPELLANT
and
THE TRUSTEES FOR THE TIME BEING OF
THE LUKAMBER TRUST                                                         FIRST RESPONDENT
A & A DYNAMIC DISTRIBUTORS (PTY) LTD                    SECOND RESPONDENT

Neutral citation:   Rajkumar Tahilram v Trustees of the Lukamber Trust and Another
(845/20) [2021] ZASCA 173 (9 December 2021)

Coram:         Zondi, Dambuza, Plasket, Hughes JJA and Meyer AJA

Heard:
3 November 2021
Delivered:  This judgment was handed down electronically by circulation to the
parties’ legal representatives via e-mail, publication on the Supreme
Court of Appeal website and released to SAFLII.  The date and time for
hand-down is deemed to be 09h45 on 9 December 2021.

Summary:
Sale – price – to be fixed by third party’s valuation – subject to limited
exceptions and in the absence of agreement to the contrary or waiver by the parties,
whenever parties agree to refer a matter to a valuer, then so long as the valuer arrives
at his or her decision honestly and in good faith, the decision is final and binding on
them and they are bound by it once communicated to them – valuer is then functus
officio insofar as the valuation and matters pertaining thereto are concerned – valuer
is then not permitted to unilaterally withdraw or cancel the valuation in order to alter or
amend it – only a court has the power to interfere with the valuer’s decision in review
proceedings - judicial ambit of the court’s power to interfere is severely circumscribed.

ORDER

On appeal from: Gauteng Division of the High Court, Johannesburg (Sibuyi AJ sitting
as court of first instance):
(1)
The appeal is upheld with costs.
(2)
The order of the court a quo is set aside and replaced with the following:
‘(a) The first respondent is to pay the amount of R2 878 574.70 to the applicant,
being the purchase consideration for the sale of his shares in the second
respondent to the first respondent.
(b) The first respondent is to pay interest at the rate of 10.25% per annum a
tempore morae on the aforementioned amount from the date of this order
until final payment.
(c) The first respondent is to pay the costs of the application.’

JUDGMENT

Meyer AJA (Zondi, Dambuza, Plasket, Hughes JJA concurring):
[1] This appeal raises the question, when parties agree to refer a matter to an
expert valuer, whether the valuer is legally permitted to unilaterally withdraw the
valuation in order to alter or amend it, once the valuer’s valuation has been
communicated to the parties concerned. The appeal, with leave of the High Court, is
against the judgment and order of the Gauteng Division of the High Court,
Johannesburg (Sibuyi AJ) delivered on 07 August 2020, dismissing the claim of the
appellant, Mr Rajkumar Tahilram (Mr Tahilram), against the first respondent, the three
trustees of the Lukamber Trust (the trust), his sole co-shareholder in the second
respondent, A & A Dynamic Distributors (Pty) Ltd (the company), for payment of the
purchase consideration for his shareholding in the company in the amount of
R2 878 574.70 plus interest and costs. In dismissing Mr Tahilram’s application, the
High Court held that the expert valuer was legally permitted to withdraw his valuation

in order to modify and correct it, and that he was not functus officio once he had
communicated his valuation to the parties.

[2] The facts relevant to the determination of the appeal are straightforward and
uncontentious. The business of the company is the sale and distribution of electronic
components. Mr Andrew Kayser is one of the trustees of the trust, which holds 70% of
the company’s issued shares, and Mr Tahilram holds 30% of its issued shares.
Mr Kayser is the managing director and responsible for the day-to-day affairs and
activities of the company. Mr Tahilram was the sales director of the company until his
employment with the company terminated on 27 March 2018. On the termination of
Mr Tahilram’s employment, he was required to offer his shares in the company to the
trust.

[3] On 29 August 2014, the trust, Mr Tahilram and the company concluded a
shareholders agreement. It contains an arbitration provision, which stipulates-
9.1
‘Save where otherwise provided in this Agreement, should any dispute arise between
the Parties in connection with-
9.1.1 the formation or existence of;
9.1.2 the implementation of;
9.1.3 the interpretation or application of the provisions of;
9.1.4 the Parties’ respective rights and obligations in terms of or arising out of this
Agreement or the breach or termination of;
9.1.5 the validity, enforceability, rectification, termination or cancellation, whether in
whole or in part of;
9.1.6 any documents furnished by the Parties pursuant to the provisions of; this
Agreement or which relates in any way to any matter affecting the interests of the Parties in
terms of this Agreement, that dispute shall, unless resolved amongst the Parties to the dispute,
be referred to and be determined by arbitration in terms of this clause 9.’(Own emphasis.)

[4] As I shall demonstrate, the shareholders agreement provides ‘otherwise’ in the
event of a shareholder exercising its pre-emptive right to purchase the shares of a
co-shareholder and a dispute has arisen between the co-shareholders relating to the
fair market value of such shares. In presently relevant parts, clause 6.2.1 and its sub-
clauses provide that ‘[s]hould any one of the Shareholders . . . cease to be employed
by the Company for whatsoever reason, then [he] shall be deemed on the day . . .

immediately preceding his . . . cessation of employment with the Company . . . to have
offered . . . all the shares . . . held by [him] in and all [his] claims against the Company
. . . to the other Shareholders . . . on, mutatis mutandis, the terms and conditions set
out in 6.1 . . .’. It continues to provide that the purchase price for the shares shall ‘be
a fair value therefore between a willing buyer and a willing seller determined on the
basis provided in 5.1.8 and 5.1.9.’

[5] In the absence of agreement between the shareholders on the market value of
the company’s shares, clause 5.1.8 provides that the fair market value of shares ‘shall
be determined . . . by the Auditors . . . and the valuation of the Auditors, communicated
to the Shareholders in writing, shall be final and binding on the Shareholders.’ (Own
emphasis.) Clause 1.1.3 defines ‘Auditors’ to mean ‘the auditors of the Company
presently being Odendaal and Co or such other auditors appointed by the Company
from time to time’. Clause 5.1.9 further provides that ‘[t]he Auditors shall value the
shares having regard to the fair value of the Business of the company and its
subsidiaries, if any, as a going concern on the basis of an arm’s length transaction
between a willing vendor and a willing purchaser, and disregarding any restrictions in
this Agreement or the Articles of Association of the Company concerning the transfer
of shares’. The offer to sell the shares to a co-shareholder must be accepted by such
co-shareholder within a stated period of time from the date of the determination of the
purchase price for such shares.

[6] The relationship between Messrs Kayser and Tahilram soured for reasons that
are presently not relevant. Ultimately, the employment of Mr Tahilram with the
company was terminated on 27 March 2018. That event triggered the operation of
clause 6.2.1 of the shareholders agreement and he was deemed on 26 March 2018
to have offered all his shares in the company to the trust. Mr Tahilram and the trust
did not reach agreement on a fair market value of Mr Tahilram’s 30% shareholding of
the company. That, in terms of clause 6.2.1, triggered the provisions of clauses 5.1.8
and 5.1.9, and the company’s auditors, still Odendaal & Co, were requested to
determine the fair market value of the company’s shares.

[7] Mr Herman Odendaal of Odendaal & Co (the valuer) determined the fair value
of the company’s business to be R4,8 million ‘plus any value unlocked on the obsolete

stock as agreed on by a willing buyer/willing seller.’ He classified ‘all stock that did not
move for a 24-month period . . . as obsolete’. His written valuation report dated               4
July 2018 was communicated to the company’s co-shareholders. The valuer thereafter
confirmed ‘that the stock value as per the detailed inventory list supplied by [the
company] for the year ended 31 March 2018 was R14 971 701.51, but based on our
obsolescence tests we believe the fair realisable value to be R4 795 249.18’. His
written valuation report dated 13 July 2018 was communicated to the company’s co-
shareholders.

[8] In a letter dated 1 August 2018, Mr Tahilram disagreed with the valuation for
reasons that are presently not relevant, except for his contention that he should
acquire 30% of the obsolete stock.  In response, the valuer advised his attorneys in a
letter dated 8 November 2018, that he notes Mr Tahilram’s disagreement with his
valuation and respects his right to disagree. The valuer made it clear that he was not
prepared to change his valuation. Mr Tahilram ultimately accepted the valuer’s
determination of the fair market value of the company’s shares.  In a letter dated
15 February 2019, from the attorneys of the trust, represented by Mr Kayser,
addressed to Mr Tahilram’s attorneys, Mr Tahilram was notified that the trust accepted
the valuer’s determination of the fair market value of the company’s shares, and that
the trust accepted Mr Tahilram’s offer to purchase his 30% shareholding. In this regard
the following is stated in the letter:
‘7.
In light of the cessation of your client’s employment with the Company and in light of
the fact that your client’s shares have been offered up for acceptance in terms of the
Shareholders Agreement, our client herewith accepts the offer to purchase your client’s 30%
(Thirty Percent) shareholding in the Company.

8.
In light thereof and at the request of our client, the Auditors of the Company on
17 January 2019 confirmed that the Company had a nett asset value of R4,877,427.00 (Four
Million Eight Hundred and Seventy-Seven Thousand Four Hundred and Twenty-Seven Rand)
as at 31 March 2018.  The value for your client’s shares in terms thereof is R1,625,809.00
(One Million Six Hundred and Twenty-Five Thousand Eight Hundred and Nine Rand).
. . .
13.
In any event, we note that your client is of the view that he should acquire 30% (Thirty
Percent) of the obsolete stock and in terms thereof, we place under your attention the
following:-

13.1
As at 31 March 2018, the stock value was approximately R15,000,000.00 (Fifteen
Million Rand) (hereinafter referred to as the “Stock Value Figure”).
13.2
R4,800,000.00 (Four Million Eight Hundred Thousand Rand) was not considered
obsolete stock and was included in the Net Asset Value calculation by the auditors and will
thus need to be deducted from the Stock Value Figure above.’

[9] The trust, however, maintained that various amounts which Mr Tahilram
allegedly owed to it should be deducted from the purchase price it was to pay to
Mr Tahilram. The nature and amounts comprising such alleged indebtedness on the
part of Mr Tahilram to the trust, are presently irrelevant. Mr Tahilram also accepted the
valuer’s determination of the fair market value of the company’s shares and, to no
avail, demanded payment from the trust of an amount equivalent to 30% of the fair
market value of the company’s shares as determined by the valuer. On 6 June 2019,
motion proceedings were instituted in the court a quo wherein he claimed such amount
plus interest and costs.

[10] The trust’s answering affidavit was deposed to by Mr Kayser on 22 July 2019,
and filed on the same day. Annexed thereto was an amended written valuation report
by the valuer dated 16 July 2019.  Therein, he reduced his initial valuation of the net
asset value of the company’s shares by an amount of R1 260 775.  Such deduction,
ex facie the amended valuation report, was for motor vehicles allocated to Mr Kayser
that were included in his original valuation. In this regard Mr Kayser said the following
in the trust’s answering affidavit:
‘18.60. In preparation of the answering affidavit, I consulted with Odendaal on 16 July 2019
and relayed the content of the Applicant’s founding affidavit to him, more particularly the
calculation relied upon to arrive at the claimed amount. He immediately remarked to me that
the reliance by the Applicant is misplaced if regard is had to the earlier objections registered
by the Applicant on 1 August 2018.
18.61 After our consultation, Odendaal supplied me with an updated valuation taking into
account further aspects and arriving at a revised value of R3, 600, 000.00. A copy of the
aforesaid valuation is attached hereto as annexure “AK44.1” and was sent to the Applicant’s
legal representatives on 19 July 2019 before the delivery of the answering affidavit herein.’

[11] It is remarkable that the reason for the valuer’s reduction of an amount of
R1 260 775 in respect of motor vehicles allocated to Mr Kayser from the net asset

value of the company’s shares as initially determined by him, is not explained by
Mr Kayser in the answering affidavit or by the valuer, nor did such deduction form part
of Mr Tahilram’s initial objections to the valuer’s initial valuation report or of the
deductions which Mr Kayser maintained should be made from the purchase price
payable by the trust for 30% of Mr Tahilram’s shares in the company.

[12] The High Court a quo found that ‘[i]t is obvious that the parties dead locked on
the purchase price’ and that ‘the applicant was obliged to invoke the arbitration clause
to resolve the deadlock on the purchase price and or the value of the obsolete stock’.
However, instead of ‘calling a halt for arbitration’, the High Court a quo exercised its
discretion ‘to tackle the dispute itself’. It considered the merits of the application and
found the question ‘whether or not the valuation of the auditors is final and binding on
the parties to be dispositive of the matter’. The High Court a quo accordingly dealt with
that question and concluded that ‘valuers function not as arbitrators but as estimators
of value’, ‘that such final and binding clauses of non judicial officers are not final and
binding on the parties’ and ‘that the applicant’s argument that the valuation is final and
binding on the parties has no merit’. The High Court accordingly dismissed the
application with costs on that basis. Subsequently, the High Court granted the
applicant ‘leave to appeal to the Supreme Court of Appeal only in respect of the
application of the functus officio principle to this matter’.

[13] Unsurprisingly, this court also refused the appellant’s application for leave to
appeal on the question whether the dispute between the parties relating to the
variation of the written valuation report was, in terms of the shareholders agreement,
an arbitral dispute. Furthermore, the President of this court, on application to her in
terms of s 17(2)(f) of the Superior Courts Act 10 of 2013, refused to refer such decision
to this court for reconsideration. For, as was held by Didcott J in Parekh v Shah Jehan
Cinemas (Pty) Ltd and Others 1980 (1) SA 304 (D) at 305G-H:
‘Arbitration itself is far from an absolute requirement, despite the contractual provision for it.  If
either party takes the arbitral disputes straight to Court, and the other does not protest, the
litigation follows its normal course, without a pause. To check it, the objector must actively
request a stay of the proceedings. Not even that disruption is decisive. The Court has a
discretion whether to call a halt for arbitration or to tackle the disputes itself. When it chooses
the latter, the case is resumed, continued and completed before it, like any other. Throughout,

its jurisdiction, though sometimes latent, thus remains intact. That all this is so emerges from
such cases as Davies v South British Insurance Co (1885) 3 SC 416; Walters v Allison 1922
NLR 238; Rhodesian Railways Ltd v Mackintosh 1932 AD 359; Yorigami Maritime
Construction Co Ltd v Nissho-Iwai Co Ltd 1977 (4) SA 682 (C).’

[14] I, therefore, turn to the question on appeal before us. It is whether the valuer
was functus officio when he determined the fair value of the company’s business to be
R4,8 million ‘plus any value unlocked on the obsolete stock as agreed on by a willing
buyer/willing seller’, communicated in his written valuation report dated 4 July 2018 to
the company’s co-shareholders, and when he determined the realisable value of the
obsolete stock to be R4 795 249.18, communicated in his further written valuation
report dated 13 July 2018 to the co-shareholders (the valuer’s valuation). In other
words, the issue for decision is whether the valuer was legally permitted to unilaterally
withdraw his valuation in order to correct or modify it, once his valuation had been
communicated to the parties concerned.

[15] One of the issues which this court in Transnet National Ports Authority v Reit
Investments (Pty) Limited [2020] ZASCA 129; 2020 JDR 2104 (SCA) was required to
determine concerns the circumstances in which the determination made by an expert
valuer or umpire jointly appointed by two parties to a contract is susceptible to being
reviewed and set aside by a court.  In this regard Petse DP said the following:
‘[32]
Before the contentions of the parties are considered, it is appropriate to say something
about Mr Seota’s role as umpire. It is common cause between the disputants that Mr Seota
was an expert valuer and not an arbitrator.  The fundamental significance of this distinction
lies in this. Our law has for over a century now always drawn a clear distinction between an
arbitrator and a valuer.  Thus, in Estate Milne v Donohoe Investments (Pty) Ltd and Others
1967 (2) SA 359 (A) at 373H-374C, Ogilvie Thompson JA said the following:
“This argument assumes something in the nature of an appeal to the arbitrator against the
decision of the auditor. That is, however, not the position.  In making his valuation, the auditor
hears neither party. He is not a quasi-judicial function. He reaches his decision independently
on his knowledge of the company’s affairs. His function is essentially that of a valuer
(arbitrator, aestimator), as distinct from that of an arbitrator (arbiter), properly so called, who
acts in a quasi-judicial capacity. The distinction between arbitri and arbitratores was well
known to our writers (see e.g. Voet, Bk. 4, 8, 2; Wassenaer, Praktijk Judicieel, Ch. 26, sec.
17; Huber, Bk. 4, chap. 21, secs 1 and 2 and other authorities listed by Gane at p. 93 of vol. 2

of his translation of that work). See also Sachs v Gillibrand and Others, 1959 SA 233 (T) at p.
236, and Divisional Council of Caledon v Divisional Council of Bredasdorp, 4 S.C. 445. Voet,
in the above-mentioned passage, distinguishes between the respective functions of an
arbitrator (arbiter and a valuer or referee (arbitrator)) and, in relation to the latter uses the
phrase in quibus viri boni arbitrio opus erat. This phrase is rendered by Sampson (p. 110) as
“requiring the arbitrament of an impartial person”, but by Gane (vol. 1, p. 738) as: “in which
there is need of the discretion of a good man”. Although the use of the word “discretion” may
perhaps be open to criticism, Gane’s translation appears to me to reflect Voet’s meaning more
correctly. The arbitrator or aestimator need not necessarily be an entirely impartial person.
In discharging his function he is of course required to exercise an honest judgment, the
arbitrium boni viri; but a measure of personal interest is not necessarily incompatible with the
exercise of such judgment (see Dharumpal Transport (Pty.) Ltd., v Dharumpal, 1956 (1) SA
700 (A) at p. 707).”
[33] This distinction serves an important purpose in review proceedings because, as
Ponnan JA put it in Lufuno Mphaphuli & Associates (Pty) Ltd v Andrews and Another [2007]
ZASCA 143; 2008 (2) SA 448 (SCA) para 22: “. . . A finding that Andrews was a valuer would
not assist Lufuno and does not require decision. Unlike an arbitrator, a valuer does not perform
a quasi-judicial function but reaches his decision based on his own knowledge, independently
or supplemented if he thinks fit by material (which need not conform to the rules of evidence)
placed before him by either party. Whenever two parties agree to refer a matter to a third for
decision, and further agree that his decision to be final and binding on them, then, so long as
he arrives at his decision honestly and in good faith, the two parties are bound by it.  . . . “
[34] Accordingly, the power of the court to interfere with an expert’s decision in review
proceedings is severely circumscribed. The judicial ambit of this power was described by this
Court in Wright v Wright [2014] ZASCA 126; 2015 (1) SA 262 (SCA) para 10 as follows:
“The position of a referee under s 19b is, as the high court correctly found, similar to that of
an expert valuator who only makes factual findings but dissimilar to that of an arbitrator who
fulfils a quasi-judicial function within the parameters of the Arbitration Act 42 of 1965. In this
regard the dictum of Boruchowitz J in Perdikis v Jamieson is apposite:
“It was held in Bekker v RSA Factors 1983 (4) SA 568 (T) that a valuation can be rectified on
equitable grounds where the valuer does not exercise the judgment of a reasonable man, that
is, his judgment is exercised unreasonably, irregularly or wrongly so as to lead to a patently
inequitable result.”
This is also the position in respect of the referee’s report – it can only be impugned on these
narrow grounds.’

[16] I revert to the crux of the appeal. Counsel for the trust relies solely on the
following dictum in the majority decision of the full court (Boruchowitz J, Mlambo J
concurring) in Perdikis v Jamieson 2002 (6) SA 356 (W) para 9, in support of its
contention that the valuer was not functus officio once he had determined the fair value
of the company’s business and had communicated his valuation to the company’s co-
shareholders, and that he was at liberty to change his valuation.

[17] There, Boruchowitz J held as follows:
‘[9]
I turn now to the question whether it was competent for Chasey – as opposed to the
court – to rectify the valuation. Recent cases have confirmed the general power of the Court
to correct a manifestly unjust determination. See Hurwitz and Others NNO v Table Bay
Engineering (Pty) Ltd and Another 1994 (3) SA 456E-H. The question whether a valuer can
rectify an award once made is a matter which did not arise for consideration in any of the
cases to which I have referred and no authority regarding this question was drawn to our
attention.
Although the Court has a general power of correction there is nothing in the decisions to which
I have referred which establishes that it is only the Court that has the power to grant relief by
way of rectifying manifestly unjust valuations. The principle stated in Bekker’s case supra at
573E-F [Bekker v RSA Factors 1983 (4) SA 568 (T)] and in particular the words “kan die
vasstelling of waardasie om billikheidredes reggestel word” do not preclude a valuer rectifying
his award. It must be borne in mind that it is the valuer, possessed of the requisite skills, that
the parties have designated to perform the valuation and not the Court.  Moreover, as a valuer
is liable for negligence in the discharge of his functions it is proper that he be entitled to correct
a manifestly wrong award so as to avoid or ameliorate any loss.
[10] The legal position as I comprehend it is therefore the following: where, as in the present
case, a manifestly incorrect or unjust valuation has taken place, practically speaking there has
been no determination in terms of the contract between the parties. The agreement does not
ipso facto lapse but remains executory leaving it open for the valuer to still make a correct
determination (see Hurwitz’s case supra at 456i). Once made there is no reason why the
correct determination should not bind the parties. In casu, the contract did not impose any
time constraint for the making of the determination and a reasonable time for so doing had not
elapsed. A similar approach to that advocated was followed by Hartzenberg J in Van Heerden
v Basson 1998 (1) SA 715I-719B. There, in the context of a dispute concerning the rectification
of a price to be determined by a third party, Hartzenberg J stated the following:
“Die partye het ooreengekom hoe die prys bepaal sou word en indien dit bepaal word in
ooreenstemming met die terme van hulle ooreenkoms is hulle uit die aard van die saak

gebonde daaraan. Wanneer die vasstelling van die prys nou foutiewelik gemaak word, druis
dit juis in teen die wesenlike grondslag van hulle ooreenkoms, naamlik dat die derde ‘n
behoorlike korrekte prys vasstel. Gevolglik is daar, prakties gesproke, geen prys bepaal nie.
Een van die essentialia van die ooreenkoms ontbreek.  Daar is dus nog nie ‘n ooreenkoms
nie. Dit doen egter nie afbreuk aan die ander bepalings van hulle ooreenkoms nie. As daar in
so ‘n geval later ‘n korrekte vasstelling uit die lig (sic) uit sou val in ooreenstemming met hulle
voorskrifte dan kan daar in beginsel nie enige rede wees waarom beide partye nie gebonde
sou wees aan die oorenkoms nie.”’1

[18] In his dissenting judgment, Van Oosten J said this at 368J-369E:
‘I regret, however, that I am unable to agree with the further conclusion that Chasey could
unilaterally and without reference to the respondent alter his first determination. I shall briefly
explain my reasons for differing with that conclusion. It is a well-established principle in our
law that a Court can rectify the award of a third party appointed by parties to an agreement to
perform a valuation function. It is not necessary to embark upon a detailed discussion of the
authorities relating to the rule. For present purposes a reference to Bekker v RSA Factors
1983 (4) SA 568 (A) at 572E as well as the more recent discussion of Marais J (as he then
was) of the Court’s general powers to correct an award in Hurwitz and Others NNO v Table
Bay Engineering (Pty) Ltd and Another 1994 (3) SA 449 (C) at 456 will suffice. The question
whether an appointed valuer himself can rectify his award unilaterally has, as far as I have
been able to establish, not been considered before.  Nor have we been referred to any direct
authority concerning this issue.
Counsel for the appellant submitted that the authorities do not establish that it is only a Court
that has the power to rectify an erroneous determination.  He contended that the valuer himself
is empowered to correct his determination.  In support of the contention counsel relied on the
following passage in the judgment of Hartzenberg J in Van Heerden v Basson [quoted in the
majority judgment]. . . . On a parity of reasoning counsel submitted that the words ‘uit die lug
sou val’2 would allow for a new unilateral determination simply substituting the erroneous
determination with the result that the parties become bound thereby.  I cannot accede to this
argument. In Van Heerden v Basson dealt with an exception raised to an application for an

1 The parties agreed how the price should be determined and if it is determined in accordance with the
terms of their agreement they are naturally bound by it. When the determination of the price is made
erroneously, it offends against the fundamental foundation of their agreement, namely that the third
determines a proper correct price. Consequently, there is, practically speaking, no price determined.
One of the essentialia of the agreement is lacking. There is then not yet an agreement. It does, however,
not detract from the other provisions of their agreement. If subsequently in such a case a correct
determination should fall from the sky in accordance with their prescripts, then in principle there cannot
be any reason why both parties would be bound by the agreement. (Own translation.)
2 [S]hould fall from the sky. (Own translation).

amendment to the plaintiff’s particulars of claim regarding the valuation by a third party of the
subject-matter of a contract.  In the present matter different considerations apply. The issue is
not whether an agreement was formed, but rather whether the valuer could unilaterally correct
his determination. What the learned Judge said in Van Heerden v Basson was not in the
context of illustrating the powers the third party may have to correct unilaterally his own
determination, which in any event was not one of the issues he was required to determine.
In my view the fact that Chasey was not acting as an arbitrator or performing functions of a
quasi-judicial nature in determining the valuation did not empower him to rectify his
determination unilaterally. Having pronounced his determination, legal consequences resulted
and his authority over the subject-matter he was required to determine, ceased. He therefore
became functus officio.  (Compare Firestone South Africa (Pty) Ltd v Genticuro AG 1977 (4)
SA 298 (A).) I see no good reason for justifying a distinction between judicial functions on the
one hand and quasi-judicial functions on the other, where a determination or judgment falls to
be corrected. This is for obvious reasons: Once the valuer has made his determination, the
question whether it was erroneously made, no longer requires him to conduct a valuation. The
only issue would be whether an error was made. Generally, unless one of the exceptions
referred to in Firestone v Genticuro applies he would not have the authority to correct the error.
In casu on the face of the award there is no error. What happened is that Van der Bijl advised
Chasey thereof.  Chasey thereupon arranged a further consultation with the appellant and Van
der Bijl whereupon his final determination, in which the error had been taken into account, was
made. In my view it has not been shown that the first valuation was, ex facie the letter in which
the determination was made, wrong.  It was only after further investigation by Chasey that the
casting error in the documents supplied to him was discovered.  Chasey was therefore not
required merely to correct an error in expressing his determination.  Even if one assumes that
Chasey acted upon patently and materially incorrect information with the result that the parties
would not be bound by the first valuation, it would, in my view, still not be competent for the
valuer himself to consider that issue. It follows from what I have said that Chasey was not
empowered or entitled to correct the determination unilaterally.’

[19] In Firestone South Africa (Pty) Ltd v Genticuro AG 1977 (4) SA 298 (A), referred
to in the minority judgment, Trollip JA said the following at 306F-308A:
‘The general principle, now well established in our law, is that, once a court has duly
pronounced on a final judgment or order, it has itself no authority to correct, alter or supplement
it. The reason is that it thereupon becomes functus officio:  its jurisdiction in the case having
been finally exercised, its authority over the subject-matter has ceased. See West Rand

Estates Ltd. v New Zeeland Insurance Co Ltd., 1926 A.D. 173 at pp. 176, 178, 186-7 and 192;
Estate Garlick v Commissioner of Inland Revenue, 1934 A.D. 499 at p. 502.
There are, however, a few exceptions to that rule which are mentioned in the old authorities
and have been authoritatively accepted by this Court. Thus, provided the court is approached
within a reasonable time, it may correct, alter, or supplement it in one or more of the following
cases:
(i)
The principal judgment or order may be supplemented in respect of accessory or
consequential matters, for example, costs or interest on the judgment debt, which the Court
overlooked or inadvertently omitted to grant (see West Rand case, supra). . . .
(ii)
The court may clarify its judgment or order, if on a proper interpretation, the meaning
thereof remains obscure, ambiguous or otherwise uncertain, so as to give effect to its true
intention, provided it does not thereby alter “the sense and substance” of the judgment or order
(see the West Rand case, supra at pp. 176, 186-7: Marks v. Kotze, 1946 A.D. 29).
(iii)
The Court may correct a clerical, arithmetical or other error in its judgment or order so
as to give effect to its true intention (see, for example, Wessels & Co, v. De Beer, 1919 A.D.
172. Randfontein Estates Ltd. v. Robinson, 1921 A.D. 515 at p. 520; the West Rand case,
supra at pp. 186-7).  This exception is confined to the mere correction of an error in expressing
the judgment or order; it does not extend to altering its intended sense or substance.  Kotzé.
J.A. made the distinction manifestly clear in the West Rand case, supra, at pp. 186-7, with
reference to the old authorities, he said:
“The Court can, however, declare and interpret its own order or sentence, and likewise correct
the wording of it, by substituting more accurate or intelligent language so long as the sense
and substance of the sentence are in no way affected by such correction: for to interpret or
correct is held not to be equivalent to altering or amending a definitive sentence once
pronounced.”
. . .
(iv)
Where counsel has argued the merits and not the costs of a case (which nowadays
often happen since the question of costs may depend upon the ultimate decision on the
merits), but the Court, in granting judgment, also makes an order concerning the costs, it may
thereafter correct, alter or supplement that order (see Estate Garlick’s case, supra, 1934 A.D.
499).  The reason is (see pp. 503-5) that in such a case the Court is always regarded as having
made its original order “with the implied understanding” that it is open to the mulcted party (or
perhaps any party “aggrieved” by the order – see p. 505) to be subsequently heard on the
appropriate order as to costs.
But, of course, if after having heard the parties on the question of costs, either at the original
hearing or at a subsequent hearing (as happened in the present case), the Court makes a
final order for the costs, there can then be no such “implied understanding”, and such an order

is as immutable (subject to the preceding exceptions) as any other final judgment or order.  .
. . ’

[20] In Civair Helicopters CC v Executive Turbine CC and Another 2003 (3) SA 475
(W), Wasserman AJ acknowledged that he was bound by the majority judgment in
Perdikis that an ‘expert valuer is free to rectify a manifestly unjust valuation or a patent
error in his report even after the delivery of same’, but he nevertheless expressed his
views on the issue since the question that had arisen in the case before him was
whether an expert valuer ‘would have been functus officio after he had issued his
report’. He expressed the view that the majority decision in Perdikis ‘is probably not
correct’ and he agreed ‘with the views expressed by the dissenting Judge on these
issues’. He concluded that ‘[t]he correct position therefore appears to be that even an
expert will be functus officio once he has performed his mandate, ie once he has
delivered his award’.

[21] In reaching that conclusion, Wasserman AJ reasoned as follows (para 39):
‘The position of an expert is, in my view, no different from that of an architect or engineer,
acting as a quasi-arbitrator, who also has to arrive at a decision honestly and impartially. The
expert is functus officio when he has exhausted his mandate. In the case of an engineer or
architect, he is functus officio once he has issued the final certificate.  Absent a contrary
provision in the contract, he is thereafter not permitted to correct or modify previous certificates
(Construction Law (supra) at 487 [Loots Construction Law and Related Issues Juta & Co Ltd,
1st ed]). The position of an architect, acting as a quasi-arbitrator was summarised by the
Appellate Division in Ocean Diners (Pty) Ltd v Golden Hill Construction CC 1993 (3) SA 331
(A) at 341-2 as follows:
‘I proceed to consider the two remaining defences raised in the plea. The first of these is based
on the purported cancellation of the certificate by the architect.  There is in my view no
substance in this defence. If the effect of a contract is to confer finality upon a certificate (which
clause 25.7, assuming its validity, does), a certificate validly issued (such as the one we are
dealing with) cannot, in the absence of a contractual provision to the contrary, or agreement
or waiver by the parties (neither of which is suggested), be withdrawn or cancelled by an
architect in order to correct mistakes of fact or value in it (Hudson’s Engineering Contracts
10th ed at 484). The contract does not provide to the contrary; clause 26, if anything, confirms
that there was to be finality as far as the architect was concerned. The only person empowered
by clause 26 “to open up, review or reverse any certificate” is an arbitrator if a dispute

concerning a certificate is submitted to arbitration (which was not the case here). Once
therefore the architect had issued the certificate he was functus officio insofar as the certificate
and matters pertaining thereto were concerned (Halsbury’s Laws of England 4th ed, vol 4(2)
para 432). That being so, he was not entitled unilaterally to withdraw or cancel it.”
It is implicit in the referral of a dispute to an expert for determination, that finality should be
achieved. Therefore, the principles enunciated in the judgment of Ocean Diners (supra) are
also of application to the powers vesting in an expert. Despite the provision in the contract
conferring finality upon the certificate, I see no reason why the same principles would not also
apply to the final report of or an award made by an expert. Absent a contrary term forming part
of the referral agreement, an expert similarly would be precluded from correcting patent
mistakes which will have the effect of changing or varying the effect of the report or award.
It is significant to note also that an engineer has the power to correct an interim certificate
even in the absence of a specific term in the contract (compare Lawrence v Kern [1910] 14
WRR 337 Ca1). A distinction therefore can be drawn between the powers vesting in an
engineer acting as a quasi-arbitrator when issuing a final certificate as opposed to performing
his functions in correcting interim certificates. Whereas it is permissible for a court to address
and correct an ambiguity, obscurity or uncertainty in an order, there is a rule against variation,
addition or contradiction [Firestone South Africa (Pty) Ltd v Genticuro AG (supra at 307)].
These principles were held to be applicable to awards made by an arbitrator [Friedman v
Mendes 1976 (4) SA 734 (W) at 736B-G]. In my view these principles also apply to the award
made or report issued by an expert.’

[22] I subscribe to the views expressed by Van Oosten J in his minority judgment in
Perdikis and those expressed by Wasserman AJ in Civair. I am respectfully unable to
endorse the reasoning and conclusion reached in the majority judgment in Perdikis on
the question under consideration. The distinction between the function of an expert
valuer, who does not perform a quasi-judicial function, and that of an arbitrator, who
fulfils a quasi-judicial function within the parameters of the Arbitration Act 42 of 1965,
has in principle or in logic, no bearing on the question whether a valuer has the power
or authority to alter or amend his or her valuation once made and communicated to
the parties. One of the arguments raised in Lufuno Mphaphuli & Associates (Pty) Ltd
v Andrews and Another [2007] ZASCA 143; 2008 (2) SA 448 (SCA) paras 21-22, was
that Andrews was not in truth an arbitrator but a valuer. Ponnan JA, as I have
mentioned, found that a finding that Andrews was a valuer would not assist Lufuno

and does not require decision, because the parties intended the Arbitration Act to
apply to their agreement.

[23] Comparable to the position in Ocean Diners (Pty) Ltd v Golden Hill Construction
CC 1993 (3) SA 331 (A) at 341-342, the effect of the shareholders agreement (clause
5.1.8 thereof) in casu is to confer finality upon the determination by the valuer of the
fair market value of the company’s shares should the co-shareholders not reach
agreement on such value. Once the valuer’s valuation had been communicated to the
parties (as was done on 04 and 13 July 2018), the valuation validly issued cannot, in
the absence of a contractual provision to the contrary, or agreement or waiver by the
parties (neither of which is suggested), be withdrawn or cancelled by the valuer to
correct mistakes of fact or value in it. The shareholders agreement does not provide
to the contrary; clause 5.1.8, if anything, expressly confirms that there was to be finality
as far as the valuer’s valuation was concerned. Once therefore the valuer had issued
his written valuation report, he was functus officio. That being so, the valuer was not
legally entitled unilaterally to withdraw or cancel his valuation report and to issue one
that altered and amended his definitive pronouncement of the fair market value of the
company’s shares.

[24] To hold otherwise (as was done by the majority judgment in Perdikis) would
lead to uncertainty and a lack of finality; how many times then may a valuer withdraw
his or her valuation and issue an amended one to correct mistakes of fact or value in
a previous one? Values of finality and certainty are foundational, especially to
administrative law – even an unlawful and invalid administrative decision exists in fact
and has legal consequences until it is set aside by a court in proceedings for judicial
review: Oudekraal Estates (Pty) Ltd v City of Cape Town and others 2004 (6) SA 222
(SCA) para 26 – and to contract law.

[25] Wearing her academic cap, now retired Justice of the Supreme Court of Appeal,
Carole Lewis, ‘The uneven journey to uncertainty in contract’ THRHR Vol 76 (2013)
80, states:
‘Bargains struck by parties should in principle be observed. That is foundational to our law of
contract.’ There may be exceptions where public policy determines that the bargain is
unconscionable as far as any party to it is concerned. [That prevailing public policy should

determine whether or not a contract is enforceable is a principle applied for decades in South
Africa: See in particular Sasfin (Pty) Ltd v Beukes 1989 1 SA 1 (A) cited and followed regularly
ever since. Since 1994 the values informing public policy are also to be found in the
Constitution.] But where that is not so, commerce requires that parties to a contract must
observe it.
. . .
I would argue that the value of certainty in commercial contracts is one that requires protection.
The principle that contracts should be complied with (pacta sunt servanda) is recognised for
that reason. [See Brand and Brodie “Good faith in contract law” in Zimmerman, Visser and
Reid (eds) Mixed legal systems in comparative perspective: Property and obligations in
Scotland and South Africa (2004) 94.] And the importance of the principle has been recognised
by the Constitutional Court on many occasions, notably in the majority judgment in Barkhuizen.
[Barkhuizen v Napier 2007 5 SA 323 (CC) para 85.  See also, most recently, the minority
judgment of Zondo AJ in Maphango v Aengus Lifestyle Properties (Pty) Ltd 2012 3 SA 531
(CC)]. That does not mean of course that all pacta are enforceable.  Since Roman times,
contracts that appear, on the face of it, to be valid might be regarded as unenforceable if they
offend public policy, or are induced by fraud undue influence and duress.  This much is trite.
. . .
And if the parties have identified a means of agreement (by a calculation or by reference to a
third party, as in Letaba Sawmills [Letaba Sawmills (Edms) Bpk v Majovi (Edms Bpk 1993 1
SA 768 (A) and Southernport  [Southernport Developments (Pty) Ltd v Transnet Ltd 2005 2
SA 202 (SCA)]) [see also SAFCOL [South African Forestry Co Ltd v York Timbers Ltd 2005 3
SA 323 (SCA) where the respondent had frustrated the reference to arbitration and was held
to be in breach of contract] an important value can be achieved – giving substance to what
they had bargained on; holding them to their bargain. [See the authorities listed in para 7 of
the judgment in Southernport.]’

[26] In their shareholders agreement the parties have identified a means of
agreement on the fair market value of the company’s shares by reference to the valuer
identified by them, and they must be held to their bargain. It is not suggested that their
agreement in that regard offends public policy or is otherwise impeachable.  Similar to
judicial and quasi-judicial determinations where it is permissible for a court or arbitrator
to address and correct an obscurity, ambiguity, uncertainty, clerical, arithmetical or
other error in a judgment or order or arbitral award without thereby altering the sense
and substance of the judgment, order or arbitral award (Firestone and Friedman), the
same holds true for written valuation reports issued by expert valuers (the minority

judgment in Perdikis and Civair). However, those exceptions do not find application in
casu.

[27] I conclude, therefore, that subject to the above-mentioned exceptions, and in
the absence of a contractual provision to the contrary or agreement or waiver by the
parties, whenever parties agree to refer a matter to a valuer, then so long as the valuer
arrives at his or her decision honestly and in good faith, the decision is final and binding
on them and they are bound by it once communicated to them. The valuer is then
functus officio insofar as the valuation and matters pertaining thereto are concerned.
That being so, the valuer is then not permitted to unilaterally withdraw or cancel the
valuation in order to alter or amend it.  Only a court has the power to interfere with the
valuer’s decision in review proceedings. The judicial ambit of the court’s power to
interfere is severely circumscribed, and limited to the narrow grounds as enunciated
in this court’s jurisprudence to which I have referred.

[28] In the result the following order is made:
(1)
The appeal is upheld with costs.
(2)
The order of the court a quo is set aside and replaced with the following:
‘(a)
The first respondent is to pay the amount of R2 878 574.70 to the
applicant, being the purchase consideration for the sale of his shares in
the second respondent to the first respondent.
(b)
The first respondent is to pay interest at the rate of 10.25% per annum
a tempore morae on the aforementioned amount from the date of this
order until final payment.
(c)
The first respondent is to pay the costs of the application.’

P A MEYER
ACTING JUDGE OF APPEAL

Appearances:

For appellant:

CE Thompson
Instructed by:

Chiba-Jivan Inc., Greenside, Johannesburg

Symington De Kok, Bloemfontein

For respondent:

IL Posthumus
Instructed by:

Pagel Schulenburg Inc., Bryanston

Hill, McHardy & Herbst Inc., Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
9 December 2021
Status:
Immediate

The following Summary is for the benefit of the media in the reporting of this case and
does not form part of the judgments of the Supreme Court of Appeal.
Rajkumar Tahilram v Trustees of the Lukamber Trust and Another (845/20) [2021]
ZASCA 173 (9 December 2021)

Today the Supreme Court of Appeal (SCA) handed down judgment upholding, with costs, an
appeal against the decision of the High Court, Gauteng Division, Johannesburg.
The primary issue before the SCA was this: When parties agree to refer a matter to an expert
valuer, whether the valuer is legally permitted to unilaterally withdraw the valuation in order to
alter or amend it, once the valuer’s valuation has been communicated to the parties
concerned.
Meyer AJA, writing the unanimous judgment of the court, concluded that subject to limited
exceptions (the mere correction of an obscurity, ambiguity, uncertainty, clerical, arithmetical
or other error without thereby altering the sense and substance of the valuation), and in the
absence of a contractual provision to the contrary or agreement or waiver by the parties,
whenever parties agree to refer a matter to a valuer, then so long as the valuer arrives at his
or her decision honestly and in good faith, the decision is final and binding on them and they
are bound by it once communicated to them.  The valuer is then functus officio insofar as the
valuation and matters pertaining thereto are concerned.  That being so, the valuer is then not
permitted to unilaterally withdraw or cancel the valuation in order to alter or amend it.  Only a
court has the power to interfere with the valuer’s decision in review proceedings.  The judicial
ambit of the court’s power to interfere is severely circumscribed, and limited to the narrow
grounds as enunciated in the SCA’s jurisprudence.
To hold otherwise, the SCA held, would lead to uncertainty and a lack of finality; how many
times then may a valuer withdraw his or her valuation and issue an amended one to correct
mistakes of fact or value in a previous one?  Values of finality and certainty are foundational,
especially to administrative law and to contract law.  In their shareholders agreement the
parties have identified a means of agreement on the fair market value of the shares of the
company concerned, by reference to the valuer identified by them and that his valuation shall
be final and binding on them; they must be held to their bargain.
~~~~ends~~~~