A South African businessman has been ordered by the Western Cape High Court to honour a verbal agreement involving an R1 million investment in a logistics company, shedding light on the complexities of trust, business dealings, and legal accountability.
A Friendship That Turned Sour
The ruling follows a dramatic legal battle between David Johnson and David Alexandra Kruyer, who first met in 2009. Their relationship, once built on mutual respect and friendship, later spiraled into a court dispute over business ownership.
Their bond extended beyond business, with both families frequently socializing together. However, financial matters ultimately drove a wedge between them, leading to litigation.
The R1 Million Agreement
By late 2012, discussions began about Johnson acquiring a stake in Concargo, a logistics and distribution company. Johnson was under the impression that his investment of R1 million, which he deposited in July 2013, would secure him a 5% ownership stake in the company.
The expectation was that the shares would come from either Kruyer or his wife, both of whom were shareholders. However, despite fulfilling his end of the deal, Johnson never received the promised shares.
Legal Action and Courtroom Drama
In January 2015, Johnson took legal action against Kruyer and four other shareholders. In court, Kruyer denied the agreement, arguing that the money was an ‘at-risk’ investment intended to support the Johannesburg branch of Concargo rather than a direct purchase of shares.
Kruyer testified that he believed the funds were meant for operational expenses, and that Johnson was aware that the money would be tracked in monthly financial reports to assess usage.
However, in February 2024, the court ruled in Johnson’s favour, stating that he had successfully proven the existence of a legitimate agreement with Concargo. The judge ruled that Johnson was entitled to restitution, highlighting that the R1 million was indeed a payment for shares that were never transferred.
Appeal Dismissed: High Court Upholds Ruling
Unhappy with the outcome, Concargo appealed the decision, arguing that the initial ruling was flawed. Kruyer insisted that the agreement was never finalized, saying:
“Based on many, many conversations with Mr Johnson, we sort of pieced together in our minds how we would envisage or see a relationship… So, we were just putting down ideas of how we envisaged we would deal with each other and what opportunities there may lie in the future.”
However, the full bench of the Western Cape High Court, consisting of three judges, found inconsistencies in Kruyer’s version of events. The court ruled that the initial judgment was sound and that Johnson had presented credible evidence to support his claims.
Final Verdict: Concargo Must Pay Up
The court dismissed Concargo’s appeal with costs, reinforcing the original ruling that Johnson was entitled to the return of his R1 million investment.
This case serves as a cautionary tale for entrepreneurs and investors alike—verbal agreements, even those made between friends, can have serious legal consequences. Trust is essential in business, but as this ruling proves, it is always best to put financial agreements in writing.
