The interdependence of agreements when concluding dealings

Introduction 

This article examines Prokas NNO and Others v Zoviflo (Pty) Ltd (61/2024) [2025] ZASCA 18 (13 March 2025) where the central question before the court was whether a Joint Venture Agreement (JVA) and a Nominee Shareholders Agreement (NSA) were interdependent.  

The facts

The matter concerned a dispute over the ownership of 80% of the issued shareholding in Prinia Investment Capital (Pty) Ltd (PIC) between the appellants, Haralambos Prokas N.O. and Others (representing the Prinia Heritage Trust), and the respondent, Zoviflo (Pty) Ltd (Zoviflo). The dispute arose from discussions aimed at creating a joint business venture to acquire, maintain, develop, lease, and sell properties.

To structure this venture, a Joint Venture Agreement (JVA) and a Nominee Shareholders Agreement (NSA) were drafted. The NSA meant that the trust would hold the proposed 80% shareholding on behalf of Zoviflo, who would be the beneficial owner thereof. An NSA, in the context of a joint venture offers administrative advantages and protects confidentiality, allowing the nominee (the trust) to operate on behalf of the beneficial owner (Zovifilo), while the latter retains the economic benefits and voting rights.

The parties to the JVA were the trust represented by Mr. Prokas, Zoviflo represented by its sole director, Mr. Mepha, and ZJ Purchase Assist (Pty) Ltd (ZJ), represented by Mr. Zissimides. The parties to the NSA were the trust and Zoviflo. 

The JVA bore the signature of Mr. Prokas, dated 9 March 2020, and the signature of Mr. Zissimides on behalf of ZJ, dated 26 March 2020. This was the initial JVA. The NSA bore the signatures of Mr. Prokas and his wife on behalf of the trust, but the date and place of signature were left blank, and no witnesses were present.

Zoviflo, through its sole director, Mr. Mepha, claimed to have signed both the initial JVA and NSA on 26 March 2020, however, the place and date of his signature were left blank on the documents, and his signature was not witnessed. 

Mr. Prokas's position was that the initial JVA he signed was merely a draft and a working document as he immediately raised objections to its terms with Mr. Georgiou, who was involved in the discussions and appeared to be representing Zoviflo at the time. Furthermore, Mr. Prokas believed that he had revoked the offer contained in the initial JVA by communicating his objections.

Subsequently, a second, revised JVA was drafted and signed by the trust and ZJ in May 2020, but it was never signed by Zoviflo. Ultimately, in October 2020, the trust and ZJ passed a resolution declaring that the joint venture contemplated in the second JVA was null and void—a decision that was communicated to and allegedly conceded by Mr. Georgiou.

Despite the apparent abandonment of the joint venture, Zoviflo later sought to enforce the NSA independently, claiming beneficial ownership of 80% of the shares in PIC. The trust, however, argued that the NSA was contingent on a valid and implemented JVA, which never materialised.

The High Court interpreted both the NSA and JVA as standalone documents, stating that the NSA was not dependent on the JVA. The High Court upheld the validity of the NSA, emphasising the importance of privity and sanctity of contracts.

The decision

The SCA ruled that the High Court erred in enforcing the NSA independently of the JVA. In paragraph 43 of the SCA judgement the court emphasised that contractual interpretation requires a holistic approach, considering text, context, and purpose. The JSA explicitly required the simultaneous conclusion of the NSA and defined “agreement” to include referenced documents such as the NSA, thereby demonstrating clear interdependence.

The court stated that Mr. Prokas’s signature on the initial JVA was an offer, which he later revoked after expressing dissatisfaction to Mr. Georgiou. The subsequent drafting of a second, unsigned JVA reinforced the view that the initial offer was no longer open for acceptance. Furthermore, since the NSA was contingent on a valid JVA, and no such agreement was finalised, the NSA could not be enforced.

Additionally, the SCA dismissed Zoviflo’s alternative claim that it owned the shares before the agreements were signed, ruling that there was no factual basis for this argument. The court noted that Zoviflo’s own pleadings contradicted this claim, as it had originally asserted that ownership arose from the NSA.

Conclusion

This judgment highlights the importance of considering the interdependence of related agreements when drafting, negotiating and concluding commercial dealings. It illustrates that even when agreements are documented separately, their terms and purpose may link them inextricably. Moreover, the case reinforces fundamental contract law principles—specifically, that an offer can be revoked before valid acceptance occurs. 

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