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[2015] ZAGPJHC 203
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Young v Curtis and Others (15/01417) [2015] ZAGPJHC 203 (11 September 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
Case
No. 15/01417
DATE:
11 SEPTEMBER 2015
In the matter
between:
NOELAND IAN
YOUNG
.........................................................................................................
Applicant
And
NEIL WHITEFOORD
CURTIS
.................................................................................
First
Respondent
LEEROY NORMAN
POULTER
............................................................................
Second
Respondent
THE KART SHOPPE
CC
..........................................................................................
Third
Respondent
SANJA KARIN
PIAZZA-MUSSA
..........................................................................
Fourth
Respondent
KYALAMI KARTING
CIRCUIT
CC
.......................................................................
Fifth
Respondent
JUDGMENT
VAN DER LINDE,
AJ:
1 The applicant
applies on motion for an order directing the first and second
respondents to purchase the applicant’s one-third
interest in
the third respondent for the purchase price of R2 986 388.90. The
application is opposed and substantial disputes
of fact are raised in
the answering affidavits. This has persuaded the applicant to ask
for a referral of the matter to trial.
The respondents oppose this
on the basis that there is no true dispute of fact that ought to
persuade the court to exercise its
discretion to refer the matter to
trial, since the evidential material that the applicant puts up as
his factual version is made
up of inadmissible evidence.
2 The relief which
the applicant seeks in the application is founded on
sections 49(1)
and (2) of the
Close Corporations Act 69 of 1984
. In terms of those
provisions, a member of a close corporation who alleges that acts or
omissions of any other members of the
close corporation are unfairly
prejudicial, unjust or inequitable to him, may make application to a
court for an order under
section 49(2).
The latter section provides
that if on such an application it appears to the court that the acts
or omissions are in fact unfairly
prejudicial, unjust or inequitable,
to the applicant, and if the court considers it just and equitable,
the court may make such
an order as it thinks fit, including an order
for the purchase of the interest of any member of the close
corporation by its other
members.
3 There are three
legs to the unfairly prejudicial, unjust and equitable conduct that
the applicant alleges against the respondents.
They are, first, that
the proposal for the training of the applicant’s son failed to
materialise and the first and second
respondents showed no interest
in him; second, that since the applicant had acquired his member’s
interest in the third respondent
he has not had sight of its
financial records; and third, that the first and fourth respondents
are involved in the misappropriation
and sharing of cash monies
generated by the fifth respondent’s business.
4 The applicant’s
case and argument was presented on the basis that the fifth
respondent is a close corporation in which the
fourth respondent held
50% of the member’s interest, and the first respondent held the
remaining 50%, but not beneficially
and only as nominee for the third
respondent. This meant that the third respondent, also a close
corporation, was said to be the
beneficial owner of 50% of the
member’s interest in another close corporation, being the fifth
respondent.
5 Since in terms of
section 29
of the
Close Corporations Act no juristic
person may hold
an interest in a close corporation through a nominee, this meant that
the member’s interest which the third
respondent was said to
have in the fifth respondent might not have been lawful. However, in
the course of argument it transpired
that the fifth respondent was
converted from a close corporation to a company on 25 June 2013.
This is a material date because
the unfairly prejudicial conduct of
which the applicant complains was committed both before and after
that date.
6 The consequence of
this fact, for the applicant’s case, is that certainly a part
of the unfairly prejudicial, unjust and
inequitable conduct on which
he relies, might not be lawfully cognisable, because it will have
been conducted in a close corporation
which was in law not an asset
of the third respondent, which was the corporation in which the first
and second respondents held
their member’s interest.
7 The point about
referring to this aspect of the matter is that in the exercise of the
court’s discretion whether to dismiss
the applicant’s
application outright at this stage, or whether instead to refer it to
trial, a factor which ought to weigh
with the court is that in a
trial action this issue will likely be properly investigated.
8 It was in this
context that the debate arose as to whether the dismissal of an
application in the present circumstances would
preclude the applicant
from thereafter instituting action afresh for the same relief. The
answer to this question is given in
Prinsloo NO & others v Goldex
15 (Pty) Ltd & another,
2014 (5) SA 297
(SCA). There, Brand, JA
held that a judgment on motion proceedings did not serve as res
judicata because the motion court in that
matter in fact did not
properly investigate the factual disputes. Two subsequent judgments
of the Supreme Court of Appeal followed
this judgment; they are
Hyprop Investments Ltd & others vs NSC Carriers & Forwarding
CC & others,
2014 (5) SA 406
(SCA), and Royal Sechaba Holdings
(Pty) Ltd v Coote & another,
2014 (5) SA 562
(SCA).
9 Similarly, in this
matter, an outright dismissal of the applicant’s application at
this stage would therefore not preclude
the applicant from
instituting action afresh, because a dismissal would not have been
against the applicant on the merits after
thorough analysis of the
facts.
10 The implication
for the present matter of this conclusion is that if this court were
now to dismiss the applicant’s application,
little purpose will
have been served other than to have mulcted the applicant in costs.
That is self-evidently a consideration
against dismissing the
applicant’s application at this stage, unless it could be
argued that the court ought for some reason
to express its opprobrium
towards the applicant’s conduct for having initiated the
proceedings on motion. Having regard to
the wording of the section,
the applicant was entitled to have done so.
11 There is however
a second consideration which operates in favour of referring the
matter to trial. The predicate of the respondents’
argument is
that the court ought not to refer the matter to trial, because no
bona fide dispute has properly been raised on the
papers. That
proposition is another way of saying that there is no point in
referring the matter to trial, because there is no
factual dispute
which is capable of being resolved at trial. But that argument
inverts in favour of the respondent an argument
which is usually
raised by an applicant against a respondent.
12 Usually an
applicant might say that since the respondent does not raise a bona
fide factual dispute, the motion court is the
appropriate forum for
resolving factual disputes in favour of the applicant (since there
are no true factual disputes). In such
a case judgment may then be
given in favour of the applicant against the respondent.
13 But it does not
follow that the converse equally applies, for this reason. An
applicant or plaintiff is always entitled as of
right to institute
proceedings against a respondent or defendant, and no court can deny
that entitlement. There is no procedure
whereby, before the matter
arrives at trial, an applicant or plaintiff’s case can be
thrown out because the applicant will
not have been able to show that
at the subsequent trial it will not have sufficient evidence to
prove its case.
14 Put differently,
if an applicant says that it wants to take a matter to trial, there
to present evidence to support its case,
there is no principle or
procedure whereby it may be stopped to do so.
15 Take the present
case. The respondents now argue that the applicant is not possessed
of any evidence that would establish a
case against them. Therefore
the matter should be dismissed and not be referred to trial.
16 However, as
discussed above, the applicant will upon such a dismissal be free
nonetheless afresh to institute action and to take
the respondents to
trial without a court being entitled to block the applicant.
17 In view of the
above considerations it is in my judgment appropriate to refer the
matter to trial and to make the usual costs
order. In this latter
regard the applicant has argued that the opposition was unreasonable
and that therefore the respondents
should be ordered to pay the costs
of the day. I am disinclined to make such an order, if only on the
basis that it may turn out
that the respondents are completely
vindicated in their submissions; in that event it will have been
unfair, all considerations
taken into account, to have penalised them
with the costs of the argument.
18 In the result I
make the following order:
1. The application
is referred to trial.
2. The applicant’s
notice of motion will stand as a simple summons, and the applicant is
to file his declaration within 30
days of this order.
3. The costs of this
application are costs in the trial.
WHG VAN DER
LINDE, SC
ACTING JUDGE OF
THE HIGH COURT
For the
Applicant: Adv. JA Kaplan
Instructed by:
Ian Levitt Attorneys
19th Floor,
Sandton City
Office Towers
Cnr Rivonia and
Fifth Streets
Sandton
Tel. 011 –
784 3310
Ref: S
Samrod/ac/MAT511
For the
Respondents: Adv. C Bester
Instructed by:
Fluxmans Inc. Attorneys
30 Jellicoe
Avenue
Rosebank
Tel. 011 –
3281700
Ref:
CBS/T389/126083
Date argued:3
September 2015
Judgment
delivered: 11 September 2015