L D v Technology Corporate Management (Pty) Ltd and Others; S D v L D (40036/16; 35926/16) [2018] ZAGPJHC 69 (23 February 2018)

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[2018] ZAGPJHC 69
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L D v Technology Corporate Management (Pty) Ltd and Others; S D v L D (40036/16; 35926/16) [2018] ZAGPJHC 69 (23 February 2018)

SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
Case
No: 40036/16
In
the matter between:
L
D
Applicant
and
TECHNOLOGY
CORPORATE MANAGEMENT (PTY) LTD
1
st
Respondent
ANDREA
CORNELLI
2
nd
Respondent
TONY
DA SILVA
3
rd
Respondent
IQBAL
HASSIM
4
th
Respondent
WAYNE
IMPEY
5
th
Respondent
AYESHA
BHULA
6
th
Respondent
ROY
COLIN
STOLER
7
th
Respondent
S
D
8
th
Respondent
And in the matter
between:
Case No:  35926/16
S
D
Applicant
and
L
D
1
st
Respondent
TECHNOLOGY CORPORATE
MANAGEMENT (PTY) LTD
2
nd
Respondent
Case summary
:
Company Law –
Companies Act 71 of 2008
- Matrimonial Property
Law –
Matrimonial Property Act 88 of 1984
- whether an
ex-spouse, who was married in community of property, upon divorce
becomes the owner of 50% or the co-owner of 100%
of shares registered
in the name of the other ex-spouse, and, vis-à-vis the
company, entitled to be registered as shareholder
or co-owner of such
shares and to payment of 50% of the dividends attaching to the shares
when declared and due for payment or
to an order interdicting the
company from paying out such dividends or half thereof to the
ex-spouse registered member in circumstances
where the community of
property between them had been dissolved by divorce, the court had
not divided the joint estate, the ex-spouses
have failed to reach
agreement on a division and a liquidator had not yet been appointed
to the task.
JUDGMENT
MEYER
J
INTRODUCTION
[1]
The parties agreed, for practical considerations and due to
overlapping issues, to a ‘consolidated’ hearing and
the
simultaneous determination of three applications:  First, an
application launched by Ms. S D (S) on 13 October 2016 under
case no.
35926/16 (S’s application).  Second, an application
launched by Mr. L D (D) on 11 November 2016 under case
no. 40036/16
(D’s application).  Third, a counter–application
launched by S during the course of D’s application.
D, in
his application, also seeks the setting aside of the interpleader
proceedings set in motion by Technology Corporate Management
(Pty)
Ltd (TCM) on 13 October 2016 under case no. 36126/16 (the
interpleader proceedings).
[2]
Central to the background and determination of these applications and
interpleader proceedings is an action brought at the instance
of two
minority shareholders of TCM, D and Jose Manuel Garcia Diez (Diez),
in December 2010 under case no. 50723/10 for relief
in terms of s 252
of the Companies Act 61 of 1973 (the old Companies Act) against TCM,
and, in the alternative, against the majority
shareholders of TCM
(the s 252 action).  The trial in the s 252 action concerned
only the merits thereof and was protracted.
It was heard for a
period of 69 court days before Boruchowitz J, commencing in 2014 and
concluding in April 2016, when judgment
was reserved.  A
comprehensive judgment was handed down by Boruchowitz J on 31 March
2017 (the s 252 judgment).
MATERIAL
FACTS
[3]
Despite the considerable length of the papers in S’s
application, D’s application and S’s counter-application,

the material facts are uncontroverted and there are only a limited
number of legal issues to be determined. S, who in her
counter-application
sought the ‘consolidation’ of these
applications, makes the following undisputed statements:
‘
I
t
is patently evident that this application, the dividend application,
as well as the interpleader proceedings, deal with the very
same
facts.  They accordingly ought, with respect, to be consolidated
and heard simultaneously.’
And-
‘…
the evidence and
submissions that will be advanced in this application, the dividend
application and the interpleader proceedings
will be exactly the
same.  It would thus be appropriate and fitting for all the
matters to be consolidated and heard at the
same time.’
[4]
S and D were married for almost 28 years.  They were married in
community of property on 14 November 1987, and divorced
by order of
this court on 26 October 2015, when an order for the division of
their joint estate was also made.  However, the
joint estate has
as yet not been divided.  They have three major children
(between the ages of 22 and 28) and two minor grandchildren
(4 and 5
years old respectively).  S left their matrimonial home in
Midrand during February 2012.  She remarried during
2016 and
lives in East London, Eastern Cape.
[5]
D became involved in an information technology business with Mr.
Andrea Cornelli (Cornelli) during the late 1980’s and
early
1990’s.  From very humble beginnings at that time, TCM, of
which D and Cornelli were the founding fathers, was
built up into a
multimillion rand enterprise, the turnover of which was estimated to
have grown to over 1 billion rand in recent
years.  Several
other shareholders had been introduced along the way.  The
registered shareholding of TCM is held as
follows:  Cornelli and
D, 30% each; Diez and Mr. Tony da Silva (Da Silva), 7.45 % each; and
the trustees of the Iqbal Hassim
family trust, one of whom being Mr
Iqbal Hassim (Hassim), 25.1%.  They, together with TCM, are the
parties to the s 252 action.
The current directors of TCM are
Cornelli, D, Diez, Da Silva, Mr Wayne Impey (Impey), Ms Ayesha Bhula
(Bhula), and Ms Monique Harris
(Harris).  Hassim ceased to be a
director of TCM on 1 October 2016.  He was replaced by Harris
who is employed by TCM
in corporate sales.  Harris, Impey (the
chief financial officer of TCM) and Bhula (the chief procurement
officer of TCM) do
not hold any equity in TCM.  All the
registered shareholders and two others – Impey and Bhula –
were (and the
only) directors of TCM until 30 September 2016.
Cornelli, Da Silva, Hassim, Impey and Bhula in their capacities as
directors
of TCM are the second to sixth respondents in D’s
application.
[6]
On 29 June 2005, the shareholders of TCM - Cornelli, D, Da Silva,
Diez and Hassim - concluded a shareholders’ agreement
to
regulate their relationship as shareholders in TCM.  Subclauses
5.1, 5.1.1 and 5.1.2 thereof provide as follows:
‘
5.1
Notwithstanding anything to the
contrary contained in the articles of association of the company, the
shareholders shall take all
steps, do all things and vote in favour
of all resolutions necessary to procure that-
5.1.1
Andrea [Cornelli] and Luis [D] shall as long as they hold at least
30% (thirty percentum) each of the company’s total
issued share
capital be entitled to appoint 2 (two) directors to the board and to
remove and replace such appointed directors;
5.1.2 The remaining shareholders being
Tony [Da Silva], Jose [Diez] and Iqbal [Hassim] shall as long as they
hold at least 15% (fifteen
percentum) each of the company’s
total issued share capital be entitled to appoint one director each
to the board and to
remove and replace such appointed directors;’
[7]
Clause 5.1.6 provides that ‘a quorum for meetings of the board
shall be comprised of any three directors, provided that
both Luis
and Andrea shall be present at all such meetings’. The day to
day management and administration of TCM are, in
terms of clause 9.1,
undertaken by the managing director (appointed by board resolution
from time to time), with strategic decisions
to be taken by the board
as constituted from time to time.  Cornelli, it is common cause,
has been the duly appointed managing
director ever since the
conclusion of the shareholders’ agreement.
[8]
The shareholders’ agreement contains detailed provisions
relating to shareholders’ rights to appoint directors designed

for each specific shareholding percentage, exit clauses, sale of
shares restrictive clauses designed for each individual member,

pre-emptive rights clauses, restraint clauses, company funding
provisions, and considerably more.  Clause 15 of the
shareholders’
agreements provides that-
‘
[n]otwithstanding anything
contained in this agreement, the parties agree that no third party
shall be admitted as a shareholder
in the company unless:-
15.1
all parties to this agreement and the board consent thereto; and
15.2 the third party shall have bound
itself in writing to all the terms and conditions contained in this
agreement.’
[9]
The shareholders also undertook, in terms of clause 18, to lodge the
share certificates in respect of their respective shares
(together
with duly signed share transfer forms in respect thereof in
negotiable form) with the auditors of TCM on the basis that
the
auditors shall be instructed to only release such documents in order
to give effect to a sale of shares in terms of the shareholders’

agreement.  The provisions of the shareholders’ agreement
are, in terms of clause 18, binding
inter alia
on any
‘receiver’ or ‘other person authorised to deal with
any shareholders’ estate’.  Clause
22 prohibits the
cession or transfer of rights without the prior written consent of
all the parties to the shareholders’
agreement, and reads thus:
‘
Save as otherwise provided in
this agreement no rights which any party may have in terms of this
agreement and no rights which any
of the shareholders may have
against the company shall be capable of cession or transfer without
the prior written consent of all
parties hereto.’
[10]
Clause 17.2 of the shareholders agreement deals with the dividend
policy, and reads as follows:
‘
17. The Shareholders shall
procure that –
17.1 . . .
17.2 the companies shall, subject to
17.1 and 17.3, declare and pay a dividend, within thirty days of the
signature of the company’s
annual financial statements, equal
to a percentage of the company’s net after tax profits earned
during the preceding financial
year, which is resolved by the board
to be available for distribution as a dividend;’
The
board of directors is thus obliged by the dividend policy of TCM to
determine a percentage of the previous financial year’s
net
profit after tax in which a dividend is to be made available, and
that, pursuant thereto, the shareholders have the right to
procure
that such dividend be declared and paid within a month after the date
of a meeting.  TCM has annually complied with
that dividend
policy and dividends were annually paid to the registered members
proportionate to their shareholding.
[11]
Although at the beginning D and Cornelli as well as their wives were
close friends and business associates, the relationship
between the
two of them began to sour since about 2007.  According to D it
became clear in 2009 that the relationship amongst
the shareholders
of TCM – D and Diez on the one hand and Cornelli and the other
shareholders on the other – had become
untenable and broken
down to such an extent that it was no longer possible to conduct the
affairs of TCM in the manner always envisaged
and as later reflected
in the shareholders’ agreement and in the unwritten
expectations and understanding which had formed
the basis of the
relationship of mutual trust and understanding.  Cornelli,
according to D, caused his dismissal from his
employment with TCM in
early 2009.   He was dismissed following a disciplinary
enquiry against him.  His internal
appeal failed.  He
referred the matter to the CCMA, but it was found that his dismissal
had not been unlawful.   A
few years later Diez was
constructively dismissed.  Both, however, remained directors and
shareholders of TCM to date.
Da Silva was of the view that the
affairs of TCM were being conducted in a manner unfairly prejudicial,
unjust and inequitable
to himself and Diez, as minority
shareholders.
[12]
The s 252 action was instituted in December 2010.  It was
preceded by an application that had been instituted in 2009
under the
same provision of the old Companies Act (the s 252 application).  The
relief sought by D and Diez in the s 252 action
was essentially that
TCM, or the remaining shareholders of TCM, should purchase their
shares against payment of a consideration
of R160 million or such
other amount as the court may determine.
[13]
S consented to the institution and pursuit of both the s 252
application and the s 252 action, and she participated in the
pursuit
thereof, although the extent of her participation is in dispute, but
that factual issue is irrelevant for present purposes.
It is
common cause that D’s membership of TCM is the asset of the
greatest value in the former joint estate of S and him.
S,
however, withdrew her consent to the further continuation of the s
252 action during December 2013, essentially because
D failed to
communicate to her an offer of settlement which he received from
Cornelli.  The offer was made some four years
after the
commencement of the litigation and in the midst of all its extreme
acrimony, hostility and the severe mistrust amongst
the parties
concerned.  The offer was, according to D, nothing more than a
demand for his capitalisation.  It reads:
‘
I
n
the spirit of Nelson Mandela’s legacy and principles, subject
to TCM board approval, I offer you 7 days to unconditionally
withdraw
your case, each party paying their own costs.
I will thereafter apply my mind, on
how to best effect transfer of your shares to good faith and synergy
investors, on a willing
buyer, willing seller basis.
This offer expires at 10 am on Monday
16 December 2013.’
[14]
This offer was referred to in the evidence as the ‘Mandela
offer’.  In the s 252 judgment, Boruchowitz J considered

that offer to have been–
‘
[n]o offer at all as no price
is stipulated for the purchase of the plaintiffs’ shares.’
I
respectfully agree with the view of Boruchowitz J.
[15]
To date, D had spent some R28 million on legal costs essentially in
respect of the s 252 action, which he mainly paid from
the dividends
declared by TCM.  On the other hand, the costs of defending the
s 252 action have at all times been paid exclusively
by TCM itself,
except on two occasions when TCM was expressly excluded by an order
of Boruchowitz J from doing so.  During
August and September
2014, S, through her attorney, Mr Michael Saltz (Saltz), sought to
prevail upon TCM, through its attorney,
Mr Roy Stoler (Stoler), to
pay S 50% of that portion of the dividend which was about to be
declared for the 2014 year and payable
to D.  Refusing to do so,
TCM, through Stoler, specifically advised Saltz that –
‘…
the registered
shareholder in the share register is [D] and [TCM] is thus obliged to
make payment to him, unless he consents otherwise
in writing, or we
have a court order to do so…’
S
then launched an urgent application under case no. 37599/14 to compel
TCM either to pay no dividend to D or only to pay 50% of
the dividend
due to him and for the balance to be held in trust pending the
outcome of other proceedings.  That application
was struck off
the roll for lack of urgency and never pursued.  The dividend
was then paid to D, timeously and in full.
[16]
A dividend for the 2015 year was declared by TCM at a board meeting
on 14 December 2015 in an amount of R14 million to be paid
out to
members proportionately in two instalments of R6 million and R8
million on 15 January 2016 and 15 February 2016 respectively.

D’s portion of the dividend amounted to R4.2 million.
Three days before the meeting S demanded that TCM pay over the

dividend not to D but into Stoler’s trust account pending her
application for the appointment of a receiver and liquidator
of the
joint estate. TCM agreed that the proceeds of the dividend be placed
in trust with Stoler and that interpleader proceedings
would be
instituted in order to determine to whom the dividend was to be
paid.  An interpleader summons under case no. 394/16
was issued
on 7 January 2016 by TCM.  D responded by launching an urgent
application in terms of s 163 of the Companies Act
71 of 2008 (the
new
Companies Act).  Therein
he sought that TCM also pays his
legal expenses in the
s 252
action and the expenditure incurred in
respect of his expert, KPMG’s Services (Pty) Ltd (KPMG).
In the alternative
he sought a declaration that he was ‘entitled
as registered shareholder of [TCM] to payment of 30% of the dividend
of R14
million declared by [TCM] on 14 December 2015’ and for
an order that TCM forthwith pay to him ‘such dividend in the

net after tax sum of R3.57 million’ (the
s 163
application).
[17]
The
s 163
application was heard by Boruchowitz J before the
re-commencement of the continuing
s 252
trial in late January 2016.
At the commencement of the hearing, Boruchowitz J required that
notification be given to the
attorney representing S, Saltz, who in
turn instructed counsel, Mr Riley, to appear on her behalf.
Argument commenced, but,
except for costs, the
s 163
application was
settled amongst the parties.  The matter of costs was reserved.
On 1 April 2017, Boruchowitz J ordered
Cornelli, Da Silva and Hassim
to pay the costs of the
s 163
application, including those of two
counsel, on a punitive scale.
[18]
Boruchowitz J said the following in the
s 252
judgment about TCM’s
withholding of the dividend declared on 14 December 2015 from D:
‘
[69] The following conduct
affords clear evidence of the defendants’ intention to deprive
the plaintiffs of the financial
wherewithal to pursue the present
claim.  Clause 17.2 of the shareholders’ agreement obliges
the board of directors
of TCM to pay a dividend, within thirty days
of the signature of the company’s annual financial statements,
equal to a percentage
of the company’s net after tax profits
earned during the preceding financial year.  According to the
evidence it was
TCM’s practice to decide upon the amount and
date of payment of a dividend between July and September of each year
when the
audited annual financial statements of TCM were approved.
For reasons best known to Cornelli and the board of directors, the

financial statements for 2015 were only approved on 11 November 2015,
but no mention was made of a dividend.  Eventually,
a dividend
was declared at a board meeting held on 14 December 2015, but D’s
dividend – amounting to approximately
R4 million – was
withheld from him.  Instead of paying it to D the dividend was
paid into TCM’s attorneys’
trust account.  TCM’s
attorney then invoked interpleader proceedings alleging that there
was a competing claim for the
dividend from D’s former wife, S
D (S).
[70] The withholding of the dividend
placed the plaintiffs in an intolerable position as they were funding
the litigation from their
own pockets.  D has assisted Diez in
paying for his legal costs.  Cornelli would have known that the
only financial benefits
received by the plaintiffs from TCM were the
dividends and that the withholding of the dividend would place undue
financial pressure
on D.
[71] It is common cause that the legal
costs incurred by the second to fifth defendants have been and are
presently being charged
to TCM.  The plaintiffs were accordingly
driven to launch an application in terms of
s163
of the
Companies
Act, 71 of 2008
, to compel payment of the dividend and for an order
that their legal costs would also be paid by TCM.  D’s
wife purported
to intervene in these proceedings. Prior to 26 October
2015, D was married to S in community of property; he was the
registered
shareholder, and she, the beneficial owner of an
indivisible half of such shares.  Whatever rights S may have to
the shares
is of no concern to TCM, which was obliged to pay the
declared dividend to D, the registered member.  After hearing
argument,
I ordered that the dividend be paid forthwith to D.
This obviated the need for the plaintiffs to proceed with the
s 163
application.  The time taken up in dealing with the
s 163
application had the effect of further lengthening the duration of the
trial.
[72] TCM had no legal right to
withhold payment of the dividend from D.  Unless a company’s
articles provide otherwise,
dividends are payable to the persons who
are registered in its register of members
(see Henochsberg on the
Companies Act
>, 71 of 2008, 24; Blackman,
Commentary on the
Companies Act,
Vol
1, 5-152).  The full dividend should have
been paid to D, as he is the registered holder of the shares.
As a matter
of law, a company recognises only its registered
shareholders, that is, those whose names are entered in its register
of members.
The company is not concerned with the principal
whose name does not appear on the register, usually described as the
“
beneficial owner”
(
Sammel
at 666D;
Oakland
Nominees (Pty) Ltd v Gelria Mining and Investment Co (PTY) Ltd
1976
(1) SA 441
(A) at (453 A-B), and
Standard Bank of South Africa
Limited v Ocean Commodities Inc.
1983(1) SA 276 (A), 289B).
[73] The legal position in regard to
the payment of dividends is described by Lindley LJ in
Société
Générale de Paris v Tramways Union Company Limited
(1884) 14 QBD 424
(at 451-452) as follows:
“
If
a shareholder in a company governed by the
Companies Act… does
not transfer his shares, but agrees to transfer them or to hold them
upon trust for another, either absolutely or by way of security,

there can be no doubt as to the validity of the agreement, nor as to
the effect of it as between the parties to it.
As between them the agreement or trust
can be enforced; but as regards the company the shareholder on the
register remains a shareholder
still.  He is the person to
exercise the rights of a shareholder, for example, to vote as such,
to receive dividends as such,
and to transfer the shares…
The person having the beneficial interest in the shares has as
against the company, no
right to them; he has, as against the
company, no right to have them registered in his own name.”
[74] In
Oakland Nominees (Pty) Ltd
v Gelria Mining and Investment Co (Pty) Ltd
1976 (1) SA 441
(A)
(at 453), the then Appellate Division expressed the position in
relation to nominee and beneficial shareholders as follows:
“
The
principal, whose name does not appear on the register, is usually
described as the ‘beneficial owner’. This is not,

juristically speaking, wholly accurate; but it is a convenient and
well-understood label.  Ownership of shares does not depend
upon
registration.  On the other hand, the company recognises only
its registered shareholders.”
See also
Standard Bank of South
Africa Limited v Ocean Commodities Inc
(1983) (1) 276 (A) at 289.
[75] It is settled law that upon
declaration of a dividend the sum due becomes a debt due from the
company to the registered shareholder
(Blackman
et al, Commentary
on the
Companies Act
(vol
1, 5-149).  I consider the delay
in declaring the dividend and the payment thereof into TCM's
attorneys' trust account as
a stratagem employed by Cornelli to
deprive the plaintiffs of the means to properly pursue the present
litigation. The launching
of the interpleader proceedings by TCM's
attorney was legally unjustified. It goes without saying that the
withholding of the dividend
in the circumstances described unduly
prejudiced D in his capacity as a shareholder.’
[19]
Shortly before the delivery of the
s 252
judgment, S launched an
application to intervene as the 6
th
defendant in the
s 252
action for purposes of filing a plea and counterclaim and TCM and the
shareholders, other than Da Sousa and Diez, applied for leave
to
amend their plea so as to allege that the court lacked jurisdiction
to make an order that any of the defendants purchase the
shares owned
by S, either solely or in co-ownership with D.  He held:
"[76] …  The
intervention application was brought on the basis that upon the
divorce from D 26 October 2015, she
became the owner of 15% of the
shares in TCM, alternatively, a separate and free co-owner with D of
30% of the shares registered
in his name. She asserted in her
proposed counterclaim that because the joint estate is still to be
divided, she is entitled to
retain
"her portion"
of
the shareholding and to have a 15% shareholding in TCM registered in
her name;  furthermore, that her interests would
be
prejudicially affected if the relief sought in the present action
were granted.
[77] On March 2017, the defendants
opportunistically applied for leave to amend their plea so as to
allege that this Court lacks
jurisdiction to make an order that any
of the defendants purchase shares owned by S either solely or in
co-ownership with D.
The alleged basis for this new-found
plea is that the defendants cannot be ordered to buy shares from a
person who refuses to sell
them.
[78] The argument that S had a legal
entitlement to have 15% of the shares registered in her name is
specious. The effect of the
granting of the order of divorce is to
bring an end to the community of property that previously existed
between S and D and to
require an equal division of the joint estate
after payment of liabilities (
see Meyer v Thompson NO
1971(3)
SA 376 (D) at 377 F).  Absent an agreement to the contrary, S
did not, upon the divorce, acquire any right to the shares
themselves
or any portion thereof.  She could not claim any asset of the
joint estate
in
specie
or in an undivided form, and was
merely entitled to a share of the net proceeds of the joint estate
after the realisation of liabilities.
[79] The fact that S is presently a
separate and free co-owner with D of 30% of the shares in TCM does
not entitle her to be registered
as a member in the register of
members. The right to be on the register is independent of the
ownership of the shares (see
Davis
v
Buffelsfontein
Gold Mining
Co Ltd
and another
1967 (4) SA 61
(W) at
633 C-F and in the reference therein to the case of
Jeffery v
Pollack and Freemantle
1938 AD1 at 18; also see Hahlo, “
South
African company law through the Cases (6 ed) at 175)
.
[80] For these reasons I held that S
did not have a direct and substantial legal interest that would
justify her intervention in
the present action.
[81] It is as well also to bear in
mind that
s 252(3)
endows this Court with the discretion to make
"such order as it thinks fit . . . with a view to bringing to
an end the matters complained of"
.  The wide nature of
the discretion would permit the Court, where appropriate, to make an
order for the di disposal of shares,
contrary to the wishes of the
owner or the beneficial owner thereof.
[82] I dismissed the intervention
application and the defendants’ proposed amendment as they
were, in my view, devoid of any
merit.  Should the Court have
been inclined to grant the orders sought, this would have had serious
and far-reaching consequences.
The plaintiffs would have
suffered grave prejudice, such, that cannot be catered for by an
appropriate costs order.  This
Court would have been required to
re-open the case and give consideration to a whole range of factual
disputes concerning the joint
estate of D and S, all of which are
irrelevant to the relief sought in the present action.  In
proceedings under
s 252
, the Court is not concerned with the personal
disputes between husband and wife.  Had the trial been reopened,
the Court would
have to consider afresh what relief other than the
disposal of the plaintiffs’ shares would be appropriate.
This would
have opened up new avenues of enquiry requiring further
evidence to be led.
[83] Nowhere in the application for
intervention did S seek to explain, or credibly explain, the reasons
why her application was
brought on the eve of the delivery of this
judgment.  It is considered to be an abuse of process where
there is an inordinate,
unexplained or inexcusable delay causing
prejudice (see
Mahommed Cassimjee v The Minister of Finance
2014 (3) SA 198
(SCA) paras [10] to [12] and cases there cited).
The excessive unexplained lateness of the application warranted the
conclusion
that it was brought with the ulterior purpose of derailing
this judgment.  The launch of the application to intervene and
to amend the defendants’ plea was in my view a
well-orchestrated stratagem with clearly defined ulterior motives; S
and Cornelli
had together conspired to derail the imminent judgment
in the trial and to deprive D of the capacity to enforce his rights.

This conduct constituted an abuse of the process of court.  For
that reason I ordered that the costs of the applications be
paid by S
and the defendants on a punitive scale.
[84] A most disturbing fact that
emerged in the intervening application is that TCM had again
deliberately withheld payment of the
2016 dividend to which D was
entitled.  Instead, the dividend was again paid into the trust
account of TCM’s attorney,
who instituted an interpleader
proceeding.  An urgent application by D to compel payment of the
dividend was struck off the
Roll by Windell J on 14 February
2017 on the grounds that it lacked urgency, and that application is
to be determined on the
opposed roll of this Court in August 2017.
For the reasons stated, TCM had no legal right to withhold payment of
the dividend
from D.’
[20]
On 14 September 2016, during the course of a meeting of TCM's board
of directors, a dividend was declared by TCM in a total
amount of R16
million, of which R4 080 000 was determined to be payable to D in two
equal tranches of R2 040 000 on 15 October
2016 and 15 November 2016
respectively. At the meeting the fact that S had made a claim against
TCM for half of the dividend declared
in the previous year, 2015, was
raised by Cornelli. It was thereafter resolved by way of a proposal
from Cornelli, therein supported
by all the other directors save for
D and Diez - but against D's contention that, as a registered member,
he was entitled to payment
by TCM of the dividend in full - that ‘a
mutually agreed instruction from [D and S] would be sought, which, if
not forthcoming
… [Impey] will seek and take legal advice to
protect TCM from any conflicting claims’.
[21]
In his answering affidavit in D's application, Stoler states the
following:
‘
I applied my own mind to the
situation that TCM again found itself in and also briefed reputable
senior and junior counsel for their
advice on the stance that should
be taken by TCM. The joint advice was that TCM had no right to decide
the dispute and that the
correct stance was for it once again to
issue an interpleader summons. It did so on 14 October 2016. The
summons in the interpleader
proceedings was issued by me in my
capacity as attorney for TCM.’
[22]
S’s application against D and TCM (cited the first and second
respondents respectively) was launched on 13 October 2016.

Therein she seeks that TCM be interdicted from paying any dividends
due to D pending the outcome of her application for the appointment

of a receiver and liquidator of the joint estate between her and D
(case no. 7300/2012), alternatively pending the outcome of the
s 252
action.  In the alternative she seeks payment from TCM of 50% of
any dividend due to D once dividends had been declared pending
the
outcome of the aforementioned proceedings.
[23]
S's application was followed by an interpleader notice issued by TCM
and signed by Stoler on 14 October 2016. D and S are cited
as the
first and second claimants respectively and they were called upon to
deliver particulars of their claims within 15 days
of the date of
service of the notice. They were further notified that TCM would
apply to this court for its decision as to TCM's
liability or the
validity of the respective claims.  D's particulars of claim
were filed and served on 4 November 2016. Therein
it is specifically
stated that the delivery of the particulars of claim ‘is
without prejudice to any of his rights, including,
but not limited
to, his right to advance the contentions’ that the
‘interpleader proceedings’-
2.1.1 have been set in motion with the
improper aim of depriving the first claimant of a dividend payment in
the sum of R4 080 000
which has in fact been declared by the
applicant and is legally payable to him;
2.1.2 are an abuse of the process of
this court;
2.1.3 are purportedly pursued by the
applicant, but in fact of pursued at the behest of certain directors
of the applicant, improperly
using the applicant as a vehicle
therefor.’
S
filed an affidavit instead of particulars of claim.
[24]
D's application was launched on 11 November 2016. Therein he
inter
alia
seeks that TCM forthwith pays to him - and that the
directors (Cornelli, Da Silva, Hassim, Impey and Bhula), insofar as
it lies
within their powers, forthwith procure such payment to him -
that portion of the dividend declared by TCM on 14 September 2016 in

the sum of R4 080 000 plus interest on the sum of R2 040 000
calculated at the rate of 9.75% per annum from 15 October 2016 and

interest at the same rate is claimed on the balance from 15 November
2016. Furthermore, he seeks that the interpleader proceedings
set in
motion by TCM in this court on 13 October 2016 under case number
36126/2016 be set aside.  He seeks an order that the
costs of
his application and of the interpleader proceedings be paid on a
punitive scale by the directors and S (if she opposes
the application
and in such event for any costs which she may be ordered to pay to be
deducted in his favour from her half share
of the joint estate when
it is divided), and, in the alternative, for TCM and any opposing
respondents  to pay those costs,
also on a punitive scale.
[25]
As I have mentioned, Boruchowitz J delivered the
s 252
judgment on 31
March 2017.  He ordered TCM to purchase the shares of D and Diez
and to take transfer thereof against payment
to them of a purchase
consideration in an amount to be determined by a referee, being the
value of their shares in TCM as at the
date on which the order was
made, 31 March 2017.  D and Diez were ordered to notify TCM in
writing of their resignation as
directors of TCM within 5 days after
the payment to them in full of the purchase consideration.  All
the parties were ordered
to take all steps, do all things and sign
all documents which are necessary to give effect to the aforesaid
provisions of the order
as expeditiously as possible, failing which
the Sheriff of this court was authorised and directed to take such
steps, do such things
and/or sign such documents on behalf of a party
or the parties for such purpose.
[26]
Boruchowitz J found that D and Diez have established three categories
of unfair prejudice or inequity:  First, that the
affairs of TCM
have been conducted in a manner that is detrimental to their
financial interests.  Second, that there is a
lack of probity or
unfair dealing in the manner in which the affairs of TCM have been
conducted that has given rise to a breakdown
of confidence and
trust.  Third, that the majority, under the direction of
Cornelli, have excluded D and Diez from participating
in the
management of TCM’s business without affording them an
opportunity to dispose of their shares in TCM at fair value
or upon
reasonable terms.
[27]
As far as the third category of unfair prejudice or inequity is
concerned, Boruchowitz J
inter alia
said the following:
‘
[128] That D had a right or, at
the very least a legitimate expectation, to participate in the
management of the business of TCM
can admit of no doubt.  TCM
may properly be described as a quasi-partnership company. Although
technically and legally governed
by the strictures of company law, in
fact and in reality, the relationship amongst the shareholders was
more akin to a partnership
in which each held 50% of the shares (see
Emphy and Another v Pacer
Properties (Pty) Ltd
1979
(3) SA 364
(DCLD) at 365- 367 and cases there sited).  Since its
establishment TCM functioned and was administered under the direct
control
of its two founding members who participated equally in its
management.  D testified that a pact was made between him and
Cornelli that for as long as TCM existed they would be equal partners
in the business, would earn the same benefits and would have
an equal
say in its affairs.  It was always intended that all
shareholders be employed by the company.  I also accept
that
despite the introduction of Diez, Da Silva and Hassim as minority
shareholders, TCM retained its identity as a domestic company
in the
nature of a partnership primarily between D and Cornelli.
[129] As a matter of law, it is
irrelevant whether or not Cornelli or the board of directors of TCM
were justified in dismissing
D from his employment. What matters is
that he has been excluded from management and has allegedly not been
able to properly dispose
of his shares at a fair value.  It is
alleged in par 14 of the particulars of claim that Cornelli has
refused to engage in
bona fide
discussions or negotiations
with the aim of permitting the plaintiffs to dispose of their shares
either to TCM, the remaining shareholders
or a third party.
They further allege that Cornelli has prevented them from having
proper access to the financial documentation
of TCM, which is
necessary to enable the plaintiffs to arrive at a fair assessment of
the value of the shares.’
Boruchowitz
J concluded thus:
‘
[163] The ineluctable
conclusion to be drawn from the above facts is that Cornelli and the
remaining shareholders of TCM have failed
or refused to engage in
bona fide
discussions or negotiations with the aim of permitting the plaintiffs
to dispose of their shares at a fair value and without resorting
to
litigation.  The defendants have not made a fair or proper offer
to purchase the plaintiffs’ shares.  This has
unfairly
prejudiced the plaintiffs.  Accordingly, the plaintiffs have
proven the allegations made in paragraph 14 of the particulars
of
plaintiffs’ claim.’
(Also
see par 44 – 48 and 130-162.)
PRELIMINARY
OBJECTION
[28]
Before I turn to the core issues in the matters before me, it is
convenient to dispose of the preliminary objection of a technical

nature raised by TCM, Da Silva, Impey and Bhula (TCM and the
directors) to the relief claimed by D for the setting aside of the

interpleader proceedings.  They argue that D was obliged to
bring an application in terms of r 30 of the Uniform Rules of
Court
to set aside the interpleader proceedings as an irregular step.
I disagree.
[29]
The grounds upon which D seeks for the interpleader proceedings to be
set aside include the ground that such proceedings constitute
an
abuse of the process of this court.  Vexatious or frivolous
litigation amounts to an abuse of the process of this court.

Vexatious and frivolous litigation have thus been defined and
re-affirmed by the Constitutional Court in
Lawyers for Human
Rights v Minister in the Presidency
2017 (1) SA 645
(CC) and in
Niekara Harrielall v University of KwaZulu-Natal
[2017] ZACC
38
para 13:
‘
What is
“vexatious”?  In
Bisset
the
Court said this was litigation that was “frivolous, improper,
instituted without sufficient ground, to serve solely
as an annoyance
to the defendant”.  And a frivolous complaint?  That
is one with no serious purpose or value.  Vexatious
litigation
is initiated without probable cause by one who is not acting in good
faith and is doing so for the purpose of annoying
or embarrassing an
opponent.  Legal action that is not likely to lead to any
procedural result is vexatious.’
[30]
In
In Re
Alluvial Creek
1929 CPD 532
at 535, it was said:
‘
An order is asked for that he
pay the costs as between attorney and client.  Now sometimes
such an order is given because of
something in the conduct of a party
which the Court considers should be punished, malice, misleading the
court and things like
that, but I think the order may also be granted
without any reflection upon the party where the proceedings are
vexatious, and
by vexatious I mean where they have the effect of
being vexatious, although the intent may not have been that they
should be vexatious.
There are people who enter into litigation
with a most upright purpose and a most firm belief in the justice of
their cause, and
yet whose proceedings may be regarded as vexatious
when they put the other side to unnecessary trouble and expense which
the other
side ought not to bear.’
[31]
This court, therefore, has a discretion at any appropriate time to
deal with the setting aside of such proceedings.  In
any event,
as was said by Schreiner
JA in
Trans-African
Insurance Co. Ltd v Maluleka
1956 (2) SA 273(A)
, at 278F-G-
‘…
technical objections to
less than perfect procedural steps should not be permitted, in the
absence of prejudice, to interfere with
the expeditious and, if
possible, inexpensive decision of cases on the real merits.’
[32]
The papers in the different proceedings before me are voluminous and
argument before me ran over three days.  There is
not a
suggestion of prejudice for any party in the matters before me if
heed is not taken of the procedural irregularity, if it
is one.
Doing so will interfere with the expeditious and more inexpensive
present decision of the matters on their real merits.
The interests
of justice, in all the circumstances, require me to exercise my
inherent jurisdiction by overlooking the procedural
irregularity, if
it is one, in order to avoid injustice.
[33]
In
Red Ant (Pty) Ltd v Mogale City Municipality and others
(16813/2012) [2013] ZAGPJHC 301 (22 March 2013), this court held that
the launching of a counter–application after the main

application had been withdrawn constituted an irregularity, but it
nevertheless decided the matter on its real merits. In this
regard it
said the following:
‘
[10] Fidelity’s
counter-application, however, is in substance a fresh application. It
was served on all the parties.
It comprises a founding,
answering and replying affidavit.  In paragraph 14 of its
answering affidavit Mogale City specifically
incorporated its
answering affidavit and annexures thereto filed in Red Ant’s
application as part of its opposition to Fidelity’s

counter-application.  The record that was delivered in terms of
rule 53 in Red Ant’s application has been relied upon
by Mogale
City and Fidelity.  Neither party was alive to the issue that
Fidelity ought to have enforced its claim against
Mogale City by way
of a separate application until I raised it with counsel during the
course of the hearing.  The entire
matter was argued over three
court days.  There is no prejudice to Mogale City if heed is not
taken of the procedural irregularity
in this matter. Doing so will
interfere with the expeditious and more inexpensive present decision
of this matter on its real merits.
Any further delay in the
finalisation of this matter may drastically reduce or even defeat the
granting of effective relief.  See:
Trans-African
Insurance Co. Ltd v Maluleka
1956 (2) SA 273
(A), at 278F-G;
Federated
Trust Ltd v Botha
1978 (3)
SA 645
(A), at 654D-E.  I am in all the circumstances of the
view that the interests of justice require me to exercise my inherent

jurisdiction by overlooking the procedural irregularity in order to
avoid injustice.  See:
Oosthuizen
v Road Accident Fund
2011
(6) SA 31
(SCA), para 19;
South
African Broadcast Corporation Ltd v National Director of Public
Prosecutions and others
[2006]
ZACC 15
;
2007 (2) BCLR 167
(CC), paras 35-36;
PFE
International Inc (BVI) and others v Industrial Development
Corporation of South Africa Ltd
2013 (1) SA 1
(CC), paras 30-33.’
(Also
see
Mogale City Municipality v Fidelity Security Services (PTY)
Ltd
(572/2013)
[2014] ZASCA 172
(19 November 2014), para 6.)
CORE
QUESTION FOR DECISION
[34]
The fate of the various proceedings before me essentially depends on
the question whether an ex-spouse who was married in community
of
property, upon divorce becomes the owner of 50% or the co-owner of
100% of shares registered in the name of the other ex-spouse,
and,
vis-à-vis
the company entitled to be registered as
shareholder or co-owner of such shares and to payment of 50% of the
dividends attaching
to the shares when declared and due for payment
or to an order interdicting the company from paying out such
dividends to the ex-spouse
registered member, in circumstances where
the community of property between them had been dissolved by divorce,
the court had not
divided the joint estate, the ex-spouses have
failed to reach agreement on the division and a liquidator had not
yet been appointed
to the task.
CONFLICTING
CONTENTIONS
[35]
Da Sousa’s contentions are simple:  he alone is at present
entitled to be registered as a shareholder of the 30%
shareholding in
TCM and as the registered member of TCM he alone is entitled
vis-à-vis
TCM to be paid the declared dividends when
payment thereof become due.  In support of his argument, he
relies on
Société Générale de Paris v
Tramways Union Company Ltd
(1884) 14 QBD 424
;
Lawrie v
Beaton
1938 TPD 206
;
Davis v Buffelsfontein Gold Mining
Co. Ltd
1967(4) SA 631 (W);
Sammel v President Brand Gold
Mining Co Ltd
1969 (3) SA 629
(A);
Oakland Nominees (Pty) Ltd
v Gelria Mining & Investment Co (Pty) Ltd
1976 (1) SA 441
(A);
Standard Bank of SA Ltd v Ocean Commodities Inc
1983 (1)
SA  276 (A);  HR Hahlo
South African Company Law through
the Cases
(6
th
ed) at 175;
Henochsberg on the
Companies Act 71 of 2008
, 24;  Blackman Jooste Everingham
Commentary on the
Companies Act
Vol
1, 5-149-152.
[36]
The policy of the law, according to those authorities and
commentators, ‘is that a company shall concern itself only
with
the registered holder and not the owner or beneficial owner of the
shares’ (
Sammel
at 666C-D;
Ocean
Commodities Inc
at
289).  The ‘company recognises only its registered
shareholders’ (
Oakland
Nominees
at
453).  The right to have one’s name be entered in the
register of a company is independent of the ownership of the
shares
(
Davis
.)
The registered shareholder ‘is the person to exercise the
rights of a shareholder, for example, to vote as such,
to receive
dividends as such, and to transfer the shares … The person
having the beneficial interest in the shares has,
as against the
company, no right to them…” (
Société
Générale de Paris
.)
The right to a declared
dividend vests in the registered shareholder on the date of
declaration (
Lawrie
at 261-262). Unless a company’s articles provide otherwise,
dividends are payable to the persons who are registered in its

register of members (
Henochsberg
on the
Companies Act
>,
71 of 2008, at 24; Blackman,
Commentary
on the
Companies Act
>,
vol 1, 5-152).
[37]
S’s contentions are also simple:  when the community of
property between her and D was dissolved by divorce on 26
October
2015, the ‘tied’ co-ownership of their joint estate
became ‘free’ co-ownership, and their respective
shares
divisible.  By operation of law, she argues, ownership of 15 %
of the 30% shares in TCM registered in the name of D
then vested in
her and she became entitled to be registered as a shareholder in the
certificated register of shareholders members
and to the benefit of
the payment of dividends attaching to the shares.
[38]
In support of her argument, she (as well as TCM and the directors)
place much reliance on the following passages in
Ex Parte Menzies
et Uxor
1993 (3) SA 799 (C).  King J concluded (at 811F)–
‘…
that the co-ownership
of their joint estate by spouses married in community of property is
a species of “tied” co-ownership,
in which the shares of
the spouses are not only undivided but also indivisible, unless a
division of the joint estate is ordered
in terms of
s 20
of the
Matrimonial Property Act 88 of 1984
.’
King
J also considered the legal position upon the dissolution of
community of property, such as by divorce.  In this regard
he
said the following (at 815C – G):
‘
According to
Hahlo
(
op
cit
at 175 n 108):
‘here, each spouse retains, subject to an order of forfeiture
of benefits, his or her half-share until
division is effected’.
This statement seems to me, with respect, quite in accordance with
the logical principles of
the common law; it is nevertheless open to
doubt.  In
Meyer v
Thompson NO
1971(3) SA 376
(D) Fannin J held as follows at 377F:
”
The
effect of the grant of an order of divorce is,
inter
alia
, to bring
automatically to an end any community of property previously existing
between the spouses and to require an equal division
of the joint
estate after payment of liabilities (
Joseph
v Joseph
1951(3) SA 776 (N)
at 778-9 and the cases there cited), even though no order for the
division of the estate is made.”
Clearly the court could not order a
continuation of community of property (“tied”
co-ownership) where there was no longer
a marriage.  But does it
necessarily follow that division of the spouses’ joint estate
must be ordered, or, if not ordered,
that such is an automatic
consequence of an order of divorce?
The implication of the above statement
by
Hahlo
is that, upon the dissolution of the community by
divorce, the ex-spouses become in effect free co-owners
entitled
to a division of the estate.  Their shares become divisible.
Given the circumstances of divorce, it can rarely arise
in practice
that they would elect to continue in co-ownership in this new form,
and thus possibly the rule has grown up that the
granting of a
divorce carried with it an automatic order of division.  It is
open to the divorcing spouses (see
s 7(1)
of the
Divorce Act 70 of
1979
) to arrive at a settlement in terms of which they could, for
example, continue as co-owners of particular assets.’
[39]
TCM and the directors, in order to convince this court that TCM was
correct to launch the interpleader proceedings and not
to take sides
or to involve themselves in the dispute between S and Da Silva, argue
that the approach of the courts in 1884 (
Société
Générale de Paris
), in 1969 (
Sammel
) and in
1976 (
Oakland Nominees
) did not and could not have taken
account of the changes brought about by the advent of the
Constitution or the following provisions
of the new
Companies Act:
Section
1 (the definitions of ‘shareholder’ and of
‘beneficial interest’),
s 50(4)
,
s 56(9)(a)
and
(b),
s 56(11)
,
s 57(1)
and
s 59(1)
, (2) and (3). In terms of those
provisions of the new
Companies Act, they
argue, a person who is not
a registered shareholder but the owner of shares in a company, has,
amongst other things, the right
to participate in shareholders’
meetings and the right to dividends.
[40]
S (through her counsel) refers to
s 7(a)
(which provides that one of
the purposes of the Act is to promote compliance with the Bill of
Rights as provided for in the Constitution,
in the application of
company law) and to s 158(a) of the new
Companies Act (which
provides
that ‘a court must develop the common law as necessary to
improve the realisation and enjoyment of rights established
by this
Act’ when ‘determining a matter brought before it in
terms of this Act, or making an order contemplated in
this Act’)
and to the fundamental rights to equality (s 9 of the Constitution),
dignity (s 7) and not to be unlawfully deprived
of property (s 25)
and contends that if S is not granted the relief she seeks and if an
order be granted in favour of D, her constitutional
rights would be
infringed.  The definition of ‘shareholder’ in the
new
Companies Act, ought
therefore, in her submission, be interpreted
and extended to include any party that is a co-owner of issued shares
in a company
and that the word ought to be defined as meaning ‘…the
holder of a share (or any co-owner thereof) issued by a company
and
who is entered as such in the certificated or uncertificated
register, as the case may be’.
BORUCHOWITZ
J ALREADY DECIDED BOTH PARTS OF THE QUESTION UNDER CONSIDERATION
[41]
Both parts of the question under consideration, however, have already
been decided by this court;  the part relating to
the
withholding of payment by TCM to its registered shareholder (De
Silva) of a declared dividend, the payment of which is due,
by
Boruchowitz J in the
s 252
action when he was called upon to make an
appropriate costs order in the
s 163
application, and the part
relating to the registration of half the shareholding or of the
co-ownership of the full shareholding
in TCM in the name of the
former spouse (S) whose marriage in community of property to the
registered shareholder (De Silva) had
been dissolved by divorce but
the joint estate not yet divided, by Boruchowitz in refusing S’s
application to intervene in
the
s 252
action.
[42]
As to S’s right to claim the withholding by TCM of dividend
payments to D or that TCM pays her 50% of the dividend payments
due
to D, Boruchowitz J held as follows:
‘
[72] TCM had no legal right to
withhold payment of the dividend from D.  Unless a company’s
articles provide otherwise,
dividends are payable to the persons who
are registered in its register of members (see:
Henochsberg
on the
Companies Act,
71 of
2008
, 24; Blackman
,
Commentary on the
Companies Act
,
Vol 1, 5-152). The full dividend should have been paid to D, as he is
the registered holder of the shares.  As a matter
of law, a
company recognises only its registered shareholders, that is, those
whose names are entered in its register of members.
The company
is not concerned with the principal whose name does not appear on the
register, usually described as the “
beneficial
owner”
(
Sammel
at 666D;
Oakland Nominees
(Pty) Ltd v Gelria Mining and Investment Co Ltd
1976
(1) SA 441(A) at 453A-B, and
Standard
Bank of South Africa Limited v Ocean Commodities Inc
1983
(1) SA 276 (A), 289B).
[43]
As to S’s legal entitlement to have 15% of the 30% shares in
TCM registered in the name of D or her co-ownership of the
30% shares
registered in her own name, Boruchowitz J held as follows:
‘
[78] The argument that S had a
legal entitlement to have 15% of the shares registered in her name is
specious.  The effect
of the grant of the order of divorce was
to bring an end to the community of property that previously existed
between S and D and
to require an equal division of the joint estate
after payment of liabilities (see
Meyer
v Thompson NO
1971 (3) SA
376 (D) at 377 F).  Absent an agreement to the contrary, S did
not, upon the divorce, acquire any right to the
shares themselves or
any portion thereof.  She could not claim any asset of the joint
estate
in specie
or
in an undivided form, and was merely entitled to a share of the net
proceeds of the joint estate after the realisation of liabilities.
[79] The fact that S is presently a
separate and free co-owner with D of 30% of the shares in TCM does
not entitle her to be registered
as a member in the register of
members.  The right to be on the register is independent of
ownership of the shares (see
Davis v Buffelsfontein Gold Mining Co
Ltd and another
1967 (4) SA 61(W) at 633C-F and the reference
therein to the case of
Jeffery v Pollak and Freemantle
1938 AD
1 at 18; see also, Hahlo, “
South African Company Law through
the Cases”
(6 ed) at 175).’
REASONS
FOR FINDING IN FAVOUR OF D AND AGAINST S
[44]
I am, for the reasons that follow, of the view that S is not entitled
to the relief she claims in her application and in her

counter-application,
viz.
to be registered as a shareholder of
TCM and for TCM to be interdicted from paying dividends to D or that
she be paid 50% of all
future dividends declared by TCM pending the
determination of certain other proceedings.
(i)
Observance of the doctrine of precedent
[45]
I agree with the reasoning and legal conclusions reached by
Boruchowitz J on both aspects of the question relating to S’s

registration as a shareholder of TCM and of TCM’s obligation to
pay the declared dividends to D, as the registered shareholder,
when
they fall due for payment.  I am unable to find that Boruchowitz
J was clearly wrong and, therefore, am obliged to observe
the maxim
stare decisis
or the doctrine of precedent by not departing
from his decision.  (See
Camps Bay Rate Payers’ and
Residents’ Association and another v Harrison and Another
2011(4) SA 42 (CC)
paras 28-30;
Firstrand Bank v Kona
and another 20003/14
[2015] ZASCA 11 (13 March 2015), paras
21-22.)
(ii)
S consented to and acquiesced in the institution and pursuit of the
s
252
action
[46]
S, by unequivocal conduct, inconsistent with the intention to claim
the registration of 15% of the shares in TCM or her co-ownership
of
30% of the shares into her own name, consented to the institution and
pursuit of the
s 252
action, also after the marriage in community of
property between her and D had been dissolved by divorce and she had
become entitled
to a division of the joint estate, and she acquiesced
in D claiming that TCM or its remaining shareholders purchase the
shares
registered in his name against payment of a reasonable
consideration.  Her conduct leads to the conclusion of an
intention
not to assail that factual situation.  (See the
discussion of the principles relating to acquiescence in
Makgosi
Properties (Pty) Ltd v Fichard N.O. and others
(24249/2015)
[2016] ZAGPJHC 374 (13 July 2016) paras 25-27 and in
Lorentzen v
Central Authority for the RSA
(South Gauteng Local Division
(A5055/2016) (delivered on 20 February 2018) para 12.)  The
unilateral termination of her consent
during December 2013, long
after
litis contestatio
and soon before the trial commenced in
2014, is, in my view, legally ineffective.
[47]
I am not suggesting that D, who at the time of the institution of the
s 252
action was still married to S in community of property, might
not have instituted the
s 252
action without the consent of S.
Section 17(1) of the
Matrimonial Property Act 88 of 1984
provides
that ‘[a] spouse married in community of property shall not
without the written consent of the other spouse institute
legal
proceedings against another person or defend legal proceedings
instituted by another person, except legal proceedings …
in
respect of a matter relating to his profession, trade or business.’
[48]
TCM is a small domestic company or what is termed a
‘quasi-partnership company’.  Its shareholders have
entered
into association upon the understanding that each of them
will also participate in the management of the company.  Their
right
to manage the affairs of TCM is
inter alia
derived from
agreement between them, their shareholders’ agreement.
That agreement as I have mentioned, also contains
provisions relating
to the rights of the various shareholders to appoint directors,
pre-emptive rights to acquire each other’s
shareholdings and
their rights to have dividends declared annually.  The
conclusion of the shareholders’ agreement by
D, in my view, was
undoubtedly in respect of a matter relating to his ‘business’
within the meaning of
s 17(1)(c)
of the
Matrimonial Property Act.
[49
]
As was said by Boruchowitz J in the
s 252
judgment:
‘
[44] A form of unfair prejudice
which is of particular relevance in the instant case arises where a
minority shareholder who has
a right or legitimate expectation to
participate in the management of the company is excluded from so
doing by the majority without
a reasonable offer or arrangement being
made to enable the excluded shareholder to dispose of his shares.
The prejudicial
inequity or unfairness lies not in the legally
justifiable exclusion of the affected member from the company’s
management,
but in the effect of the exclusion on such member if a
reasonable basis is not offered for a withdrawal of his or her
capital.
It was emphasized in
O’Neill
[
O’Neill
and another v Phillips and
others
[1999] UKHL 24
;
[1999] 2 ALL ER 961
at 974-975] that “
it
will almost always be unfair for a minority shareholder to be
excluded without an offer to buy his shares or to make some other

fair arrangement
”.
D’s
claim in the
s 252
action for TCM or the other shareholders to
purchase his shares in TCM is equally, in my view, in respect of a
matter relating
to his ‘business’ within the meaning of
s
17(1)(c).
Fairness requires that a minority shareholder, such
as D, should not have to maintain his investment in a company, TCM,
managed
by the majority with whom he had fallen out. (See
Bayley v
Nells
2010 (4) SA 438
(SCA) para 23.)
(iii)
Boruchowitz J determined the fate of the 30% shareholding in question
[50]
Boruchowitz J determined the fate of the 30% shareholding in TCM
which is registered in the name of D:  TCM is to purchase
them
for an amount to be determined by a referee.  D, on the other
hand, is also in terms of the order obliged to ‘take
all steps,
do all things and sign all documents which are necessary to give
effect to the purchase of the shares by TCM.
That order, as
Boruchowitz J in my respectful view correctly found (para 81), falls
within the wide nature of the discretion endowed
upon a court in
terms of
s 252
(3) to make an order for the disposal of shares
contrary to the wishes of the owner or beneficial owner thereof.
[51]
Furthermore, it is now settled law that a beneficial owner of shares
in a company is not eligible to join as a co-applicant
or
co-plaintiff with the registered member in proceedings in terms of
s
252
of the old
Companies Act.  Petse
JA, who wrote the unanimous
judgment of the Supreme Court of Appeal in
Smyth v Investec Bank
Ltd
(674/2016)
[2017] ZASCA 147
(26 October 2017)
,
inter
alia
referred with approval to the
Sammel
and
Ocean
Commodities
decisions on which Boruchowitz J also relied in his
judgment on the question of TCM’s withholding of the 2015
dividend that
had been due and payable to D.  In this regard
Petse JA said the following:
‘
[21] In
Sammel
and others v President Brandt Gold Mining Co Ltd
1969
(3) SA 629
(A) at 666C-D, this court said that a “nominee”
is a person who is nominated or appointed to hold the shares in his

name on behalf of another and that the nominee is in effect simply an
agent of the transferee.  And that the reason why “nominee”

and not “agent” is used is because the word comes from
the English Law.  This court went on to state at 666D-E
that:
“The policy of the law is that a company shall concern itself
only with the registered holder and not the owner or
beneficial owner
of the shares”.  The nominee does not hold the shares as
an agent for another but must himself appear
on the register as the
holder of the shares.
Henochsberg
on the
Companies Act
Butterworths
Lexis Nexis Service Issue 33 of June 2011 states the fact that the
nominee holds the shares on behalf of another, generally known
as the
“owner” or the “beneficial owner”, does not
appear on the company’s register.  This is
explained with
reference to the decision in
Standard
Bank of SA Ltd v Ocean Commodities Inc
1983
(1) SA 276
(A) at 289.  There this court said that it is the
policy of the law that a company should concern itself only with the
registered
owners of the shares.’
The
Supreme Court of Appeal concluded that beneficial owners are not
members as contemplated in
s 252
and ‘for as long as the
nominees’ names remained in the register of members, the
beneficial owners lacked a legal interest
in the subject-matter of
the litigation’ (para 55).
(iv)
The provisions of the new
Companies Act do
not vest S with the right
to claim, vis-à-vis TCM, what she is claiming in these
proceedings
[52]
The provisions of the new
Companies Act on
which TCM, the directors
and S rely, do not vest S, as the co-owner of the former joint estate
between her and D and who presently
is entitled to a share of the net
proceeds of the joint estate after the realisation of liabilities,
with the right or entitlement
to exercise any shareholder rights
vis-à-vis
TCM.  She does not have the right to
claim,
vis-à-vis
TCM, registration of half the shares
registered in D’s name or to registration of her co-ownership
in its certificated share
register or to claim the withholding by TCM
of dividend payments to D or for TCM to pay her the dividends
attaching to 50% of the
shares registered in the name of D.
TCM, the directors and S conflate the concepts of ‘beneficial
ownership’
and ‘beneficial interest’.  The
concept of ‘beneficial interest’ as defined in
s 1
of the
new
Companies Act is
of particular relevance to the disclosure
requirements of that Act.  (See Richard Rachlitz ‘
Disclosure
of Ownership in South African Company Law’
2013
Stell
LR
406 at 414
et
seq;  SM Luiz ‘
The
Companies Act 71 of 2008
and the disclosure of and Rights of Access
to Information about securities’
2014 SA Merc LJ 167.)
[53]
I respectfully agree with the conclusion of Rachlitz at 414 ‘…
that South African Company Law distinguishes owners
of a share,
shareholders, and holders of a beneficial interest, and that
shareholder rights can be exercised by the person directly
entitled
to do so himself, or through a proxy’.  It is trite that,
in terms of our company law, ownership is a bundle
of rights
attaching to the share and vesting in the owner, who, from the
owner’s perspective and not from the company’s,
alone is
entitled to the shareholder’s rights.  But it is, as a
general rule, only the registered shareholder who is
entitled to
exercise the shareholder rights
vis-à-vis
the company
(Rachlitz at 407-408).
[54]
‘Shareholder’, in terms of
s 1
of the new
Companies Act,
is
defined to mean the person who is ‘the holder of a share
issued by a company and who is entered as such in the certified or

uncertified securities register, as the case may be’.
A company, in terms of
s 51(5)
, ‘must enter in its security
register every transfer’ of securities.  As stated by JS
Oosthuizen and PA Delport
in the article entitled ‘
Rectification
of the Securities Register of a Company and the Oppression Remedy’
2017 (80) THRHR 228
at 246, the ‘significance of this
obligation, and the right of the holder of securities’ lie in
s
37(9)
, which provides that a person ‘acquires the rights
associated with any particular securities of a company … when
that
person’s name is entered in the company’s
certificated securities register … and … ceases to have
the
rights associated with any particular securities of a company …
when the transfer to another person, re-acquisition by the
company,
or surrender to the company has been entered in the company’s
certificated securities register …’.
Section 57(1)
and (7) of the new
Companies Act extends
the definition of the term
‘shareholder’ to include a person who is entitled to
exercise any voting rights in relation
to the company for governance
purposes and with regard ‘to the exercise of authority within a
company in respect of any matter
arising in terms of this Act or a
company’s Memorandum of Incorporation’.
[55]
As was further stated by Rachlitz, ‘there are three means by
which a person who is not registered as a shareholder can

nevertheless exercise shareholder rights
vis-à-vis
a
company, namely by means of a beneficial interest, as proxy, or as a
holder of a debenture which has voting rights attached to
it’
(at 411).  Section 1 defines the concept of ‘holder of a
beneficial interest’ – as opposed to
the legal concept of
‘beneficial ownership’ – as ‘[t]he right or
entitlement of a person, through ownership,
agreement, relationship
or otherwise, alone or together with another person to (a) receive or
participate in any distribution in
respect of the company’s
securities; (b) exercise or cause to be exercised, in the ordinary
course, any or all of the rights
attaching to the company’s
securities; or (c) dispose or direct the disposition of the company’s
securities, or any
part of a distribution in respect of the
securities… .’
[56]
Thus, as pointed out by Rachlitz, ‘a person can hold a
beneficial interest in a share without being the owner thereof,
and
there can be many persons who hold a beneficial interest in one and
the same share’ (at 412).  The new
Companies Act
distinguishes
between certificated and uncertificated shares in
respect of the entitlement of a holder of a beneficial interest to
exercise shareholder
rights.  With respect to certificated
shares,
s 56(9)
provides that ‘[a] person who holds a
beneficial interest in any [certificated] securities may vote in a
matter at a meeting
of shareholders, only to the extent that the
beneficial interest includes the right to vote on the matter, and the
person’s
name is on the company’s register of disclosures
as the holder of a beneficial interest, or the person holds a proxy
appointment
in respect of that matter from the registered holder of
those securities’.  However, a register of disclosure
must,
in terms of
s 117(1)(i)
, only be established by regulated
companies.  The voting right, as correctly pointed out by
Rachlitz, can therefore not be
allocated by means of mere beneficial
interest in unregulated companies with certificated shares.
[57]
S has not shown any entitlement to exercise shareholder rights
vis-à-vis
TCM in respect of the shares registered in
the name of D.  It is not suggested that TCM has a register of
disclosures or that
her name is on TCM’s register of
disclosures.  She may therefore also not vote in a matter at a
meeting of shareholders,
unless, of course, she obtains a proxy
appointment from the registered shareholder, D. She also does not
rely on any provision
of TCM’s articles or memorandum of
incorporation that vests her with any entitlement to exercise
shareholder rights.
On the contrary, when D argued in reply he
wished to give evidence from the bar and introduce TCM’s
articles in order to
show that dividends are only payable to the
registered shareholders of TCM, but his attempt was vehemently
opposed by TCM and the
directors and by S.  I did not permit D
to present such evidence.  Otherwise, the matter was likely to
be postponed on
the third day of argument at great cost and
inconvenience.  Furthermore, it is S who needs to establish her
entitlement to
exercise shareholder rights.
[58]
As I have already mentioned, Cornelli, D, Da Silva, Diez and Hassim
have, in terms of their shareholders’ agreement,
entered into
an association upon the understanding that each of them will
participate in the management of TCM.  They, in
terms of their
shareholders’ agreement, are the persons to be registered as
shareholders and to exercise the rights of a
shareholder.
Cornelli and D each has the right to appoint two directors for as
long as they each hold 30% of TCM’s
total issued share
capital.  Any three directors comprise a quorum for board
meetings, provided Cornelli and D are present
at such meetings.
They further
inter alia
agreed on pre-emptive rights and
specifically that no third party shall be admitted as a shareholder
unless all parties to the
shareholders’ agreement and the board
consent thereto.  Diez and D have withheld their consent for S
to be admitted
as a shareholder.  Furthermore, it is for the
shareholders to procure that TCM declares annual dividends.
Dividends
have been annually declared and paid to the registered
shareholders.
[59]
It requires emphasis that S’s co-ownership of the former joint
estate between her and D and her present entitlement to
a share of
the net proceeds of the joint estate after the realisation of
liabilities, does not
per se
vest her with the legal capacity
to exercise any shareholder rights
vis-à-vis
TCM.
The right to have one’s name entered in the register of a
company is independent of the ownership of the shares.
The
right to a declared dividend vests in the registered shareholder on
the date of declaration.
[60]
It is also noteworthy that
s 15(3)(b)(vi)
of the
Matrimonial Property
Act 88 of 1984
, which applied to the marriage in community of
property between S and D prior to its dissolution, provides that the
spouse in a
marriage in community of property shall not without the
consent of the other spouse ‘receive any money due or accruing
to
the other spouse or the joint estate . . . by way of dividends or
interest on or the proceeds of shares or investments in the name
of
the other spouse’.  When a spouse withholds such consent,
a court may, in terms of
s 16(1)
, on application of the other spouse,
give such spouse leave to receive the dividend without the required
consent if it satisfied
that the withholding of the consent was
unreasonable.  D did not, during their marriage, consent to S
receiving the money
due to him by way of dividends from TCM nor did S
obtain the leave of a court to receive such monies or part thereof
without D’s
consent.
(v)
S is only entitled to a share of the net proceeds of the joint estate
after the realisation of liabilities and, prior to its
division,
cannot claim any asset in
specie
or in an
undivided form
[61]
S (as well as TCM and the directors) read into
Ex parte Menzies
more than what was indeed held to be the legal position upon the
dissolution of community of property, such as by divorce.
There
it was held that the co-ownership of the joint estate by spouses
married in community of property is a species of ‘tied’

co-ownership in which the shares of the spouses are undivided and
indivisible.  An order of divorce brings an automatic end
to the
community of property previously existing.  Had it not been for
the rule that the granting of a divorce order ‘carried
with it
an automatic order of division’ the ex-spouses would have
continued their co-ownership, but in the form of ‘free’

co-ownership.  In this regard, King J specifically said that-
‘
[g]iven the circumstances of
divorce, it can rarely arise in practice that they would elect to
continue in co-ownership in this
new form, and thus possibly the rule
has grown up that the granting of a divorce carried with it an
automatic order of division.
It is open to the divorcing
spouses (see
s 7(1)
of the
Divorce Act 70 of 1979
) to arrive at a
settlement in terms of which they could, for example, continue as
co-owners of particular assets.’
[62]
In
Meyer v Thompson NO
1971 (3) SA 376
(D), Fannin J held as
follows at 377F:
“’
The effect of the grant
of an order of divorce is,
inter
alia
, to bring
automatically to an end any community of property previously existing
between the spouses and to require an equal division
of a joint
estate after payment of liabilities (Joseph v Joseph
1951 (3) SA
776(N)
at 778-9 and the cases there cited), even though no order for
the division of the estate is made.”
[63]
In LAWSA Vol 16 (2nd Ed.) para 89 it is stated that the spouses or
ex-spouses-
‘
. . . can divide the estate by
agreement or they can appoint a liquidator to do so.  If they
cannot agree on a liquidator,
the court can appoint one to this
task.  Once a liquidator has been appointed he proceeds to
liquidate the assets by selling
them by public auction, not by
private treaty unless the spouses give him permission to do so.
Since the community of property
has come to an end the spouses lose
whatever capacity they had by virtue of their marriage to dispose of
the assets of the joint
estate, subject to the same exceptions which
obtain where the marriage is dissolved by the death of one of them,
so that they can
use the assets for their maintenance or the
maintenance of their dependants or the maintenance of the assets of
the joint estate.
The spouses or the liquidator of the
estate must also settle the debts of the estate.  ... ‘
[64]
I thus agree with Boruchowitz J (para 78), that ‘[a]bsent an
agreement to the contrary, S did not, upon the divorce,
acquire any
rights to the shares themselves or any portion thereof.  She
could not claim any asset of the joint estate in
specie
or in
an undivided form, and was merely entitled to a share of the net
proceeds of the joint estate after the realisation of liabilities.’

After all, a marriage in community of property is in a ‘community
of property and of profit and loss -
communio bonorum
,
gemeenschap van goederen. (Prof JR Hahlo
South African Law of
Husband and Wife
Fifth Ed. 1985 at 157).
(vi)
The expansive interpretation of the word ‘shareholder’ in
s 1
of the new
Companies Act for
which S contends
[65]
Leaving aside the fact S did not raise the constitutional issue nor
the expansive interpretation of the word ‘shareholder’
in
the new
Companies Act for
which she contends in her affidavits and
her non-compliance with r 16(A)(1)(i) of the Uniform Rules of Court
(the purpose of which
provision is ‘to bring cases involving
constitutional issues to the attention of persons who may be affected
by or have a
legitimate interest in such cases, so that they may take
steps to protect their interests by seeking to be admitted as
amici
curiae
with a view of drawing the attention of the court to
relevant matters of fact and law to which attention would not
otherwise be
drawn’ (
Phillips v SA Reserve Bank and others
2013 (6) SA 450
(SCA) paras 30-32 and 65;
De Lange v Methodist
Church and Another
2016 (2) SA 1
(CC), para 30 (d) and 60-64)), I
am of the view that to interpret the definition of ‘shareholder’
in the manner for
which S contends would do violence to the language
of the section and of the distinction drawn in the new
Companies Act
between
owners of a share, shareholders and holders of a beneficial
interest.
[66]
Apposite here is the following
dictum
by Petse JA in
Smyth
(supra):
‘
[45] In my judgment, to
interpret
s252
in the manner for which the appellants contend would
do violence to the language of the section.  In
Standard
Bank Investment Corporation Ltd v Competition Commission &
others; Liberty Life Association of Africa Ltd v Competition

Commission
[2000] ZACSA 20
[2000] ZASCA 20
; ;
2000 (2) SA 797
(SCA) this court, with reference to the judgment of
Innes CJ in
Dadoo Ltd &
others v Krugersdorp Municipal Counsel
1920 AD 530
,
emphasised that it would be wrong for courts to ignore the clear
language of a statute under the guise of adopting a purposive

interpretation as doing so would be straying into the domain of the
legislature.
[46] In
Dadoo
, Innes CJ stated
the following (at 543):
“
Speaking
generally, every statute embodies some policy or is designed to carry
out some object.  When the language employed
admits of doubt, it
falls to be interpreted by the court according to recognised rules of
construction, paying regard, in the first
place, to the ordinary
meaning of the words used, but departing from such meaning under
certain circumstances, if satisfied that
such departure would give
effect to the policy and object contemplated.  I do not pause to
discuss the question of the extent
to which a departure of the
ordinary meaning of the language is justified, because the
construction of the statutory clauses before
us is not in
controversy.  They are plain and unambiguous.  But there
must, of course, be a limit to such departure.
A judge has
authority to interpret, but not to legislate, and he cannot do
violence to the language of the lawgiver by placing
upon it a meaning
of which it is not reasonably capable, in order to give effect to
what he may think to be the policy or object
of the particular
measure.”
[47] In
South African Police
Service v Public Servants Association
[2006] ZACC 18
;
2007 (3) SA
521
(CC), the Constitutional Court embraced this theme and said (para
20):
“
Interpreting statutes within
the context of the Constitution will not require the distortion of
language so as the extract meaning
beyond that which the words can
reasonably bear.  It does, however, require that the language
used be interpreted as far as
possible, and without undue strain, so
as to favour compliance with the Constitution.  This in turn
will often necessitate
close attention to the … and
institutional context in which the provision under examination
functions.  In addition
it will be important to pay attention to
the specific factual context that triggers the problem requiring
solution.”
See also
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs &
others
[2004] ZACC 15
;
2004
(4) SA 490
(CC) para 89.’
[67]
In
Minister of Higher Education and Training v Mthembu
2012
JDR 1540 (FB), Daffue J explains the principle that a judge has the
authority to interpret legislation, but not to legislate,
thus:
“
[24] Sitting as a Judge having
to interpret a section in a statute, I am cautioned by the maxim
iudicis est ius dicere sed
non dare/facere
, or put
otherwise, it is the duty of the judge to expound, interpret or
explain the law, but not to make it.  The following
warning of
Lourens du Plessis should also be adhered to:
“
At any rate, tampering with the
ipsissima verba
of
a statute, though not precluded, should be an exercise in
circumspection and restraint with due deference to one of the
cornerstones
of constitutional democracy, namely the horizontal
division of powers in the state.  The wording of a legislative
text binds
state authority for
trias
politica
purposes.
The interpreter–judge is no legislator and must constantly
remind him- /herself of that.  Adaptive interpretation
is meant
to make sense of the legislature’s law as it stands and not to
substitute the judge’s law for it.”
See
Du Plessis L Re – interpretation of Statutes, 2002 ed, p229.’
CONCLUSION
[68]
I am therefore of the view that S’s application and
counter-application should dismissed and that D’s application

should succeed, including the relief for the setting aside of the
interpleader proceedings.
COSTS
[69]
D, who is cited as the first respondent in S’s application and
as the fifth respondent in her counter-application, opposed
the
relief sought by her in each case.  Diez, who is cited as the
sixth respondent in S’s counter-application, opposed
the relief
sought by her in that application.  She should be ordered to pay
the costs incurred by D in opposing the relief
sought by her in her
application and counter-application as well as any costs incurred by
Diez in opposing the relief sought in
her counter-application, such
costs to include those incurred by the engagement of two counsel,
whenever so employed.  The
costs payable to D should be deducted
from S’s half share of the residue of the joint estate upon the
division thereof.
[70]
D in the first instance seeks that Da Silva (the third respondent),
Hassim (the fourth respondent), Impey (the fifth respondent)
and
Bhula (the sixth respondent) as well as S (the eighth respondent),
jointly and severally, pay the costs of his application
and of the
interpleader proceedings, or, in the alternative, that such costs be
paid by TCM (the first respondent), together with
any other
respondent opposing his application, jointly and severally.
[71]
In seeking costs against those directors and not the company, TCM, D
relies on the principle that where the dispute is in substance
one
between the shareholders, with the company merely a nominal party to
legal proceedings without any interest in the matter,
the company’s
money should not be expended on the dispute.  (See Blackman et
al
Commentary on the
Companies Act
Vol
. 2, 9-54-2/9-55/9-56.)
[72]
The dispute arising from S’s counter-application (that her name
be entered in TCM’s certificated securities register)
is rather
a dispute between the shareholders, but not the withholding of the
payment of a dividend to a registered shareholder,
the payment of
which is due.  It was the directors
qua
directors who
resolved to obtain legal advice with regard to the dispute between S
and D and who resolved to institute the interpleader
proceedings.
Furthermore, Impey and Bhula are not and have not been shareholders
of TCM.  Hassim, at the time when TCM’s
board of directors
resolved not to pay the 2016 dividend to D and to institute
interpleader proceedings, was no longer a director.
D withdrew
his claim for a costs order against Cornelli, who is a 30%
shareholder in TCM and its managing director, who D in his
founding
papers cast as the only wrongdoer.  The remaining directors are
portrayed by him as puppets and lackeys.  It
seems to me in all
the circumstances inappropriate to order Da Silva, Hassim, Impey and
Bhula to pay the costs of D’s application
and of the
interpleader proceedings.
[73]
TCM, Da Silva, Impey and Bhula are represented by the same firm of
attorneys and by the same senior and junior counsel.
One
answering affidavit, deposed to by Impey on his own and their behalf,
was filed ‘to avoid an adverse costs order’.
The
answering affidavit essentially addresses the merits of the disputes
between D and S in order to convince this court
that TCM was correct
in launching the interpleader proceedings.  I, therefore, do not
believe that any adverse costs order
should be made against D because
of his claim, in the alternative for costs against Da Silva, Impey
and Bhula.  I am fortified
in this view by the fact that they
and TCM persisted in their opposition to D’s application
despite the handing down of the
s 252
judgment on 31 March 2017.
[74]
The position of Hassim (the fourth respondent), however, is
different.  He is represented by other attorneys and counsel.

A separate answering affidavit was filed on his behalf.
Appearance on his behalf at the commencement of the proceedings,

which ran over three days before me, was brief and essentially
limited to the adverse costs order that D also seeks against him.

He ceased to be a director of TCM on 1 October 2016, which was prior
to the launching of D’s application.  As at that
stage he
had not participated in any decision to withhold the payment of the
2016 dividend to D.  Furthermore, he has no power
to procure the
payment to D of the dividend declared by TCM on 14 September 2016.
I am of the view, therefore, that Da Sousa
should pay his costs of
opposing an adverse costs order being made against him.
[75]
D also seeks costs on a punitive scale.  He, however, in his
founding papers asserts that Cornelli is the directing and

controlling mind of TCM.  He attributes collusion between
Cornelli and S.  He does not pin collusion and impropriety
on
the other directors in his founding papers.  He withdrew his
request for a costs order against Cornelli and also all the

allegations of impropriety made against him in his founding and
replying affidavits.  As far as D’s application is
concerned, I am in all the circumstances of the view that there are
no special grounds present to justify deviation from the ordinary

rule that the successful party is awarded costs as between party and
party.  However, the issuing of the interpleader notice
was
vexatious and an abuse of the procedures of this court, which
justifies its setting aside with costs on a punitive scale.
ORDER
[76]
In the result the following order is made:
(a) In the application
under case number 40036/2016 between the applicant, Luis Manuel Rito
Vaz D (Mr D) and the first respondent,
Technology Corporate
Management (Pty) Ltd (TCM), the fourth respondent, Iqbal Hassim (Mr
Hassim), the eighth respondent, S Ann
Vaz D (Ms D) and others:
(i)
TCM is to pay the sum of R4 080 000, being the net proceeds of
the dividend declared by TCM in favour of Mr D on 14 September
2016,
to Mr D forthwith, together with interest thereon at the rate of
9.75% per annum on the sum of R2 040 000 from 15 October
2016 to
date of payment and on the balance in the sum of R2 040 000 from
15 November 2016 to date of payment;
(ii)
the interpleader proceedings under case number 36126/2016 are hereby
set aside;
(iii)
TCM and Ms D, jointly and severally, the one paying the other to be
absolved, are to pay Mr D’s costs of the application,
such
costs to include those incurred by the engagement of two counsel,
whenever so employed;
(iv)
the costs which Ms D is liable to pay shall be deducted in favour of
Mr D from her half share of the residue of the joint estate;
and
(v) Mr D is to pay the
costs incurred by Mr Hassim in opposing the adverse costs order
sought against him.
(b) In the
counter-application under case number 40036/2016 launched by Ms. D
against Mr D, Jose Manuel Garcia Diez (Mr Diez) and
others:
(i)
the counter-application is dismissed;
(ii)
Ms. D is to pay the costs incurred by Mr D and any costs incurred by
Mr Diez in opposing the relief sought by her in the
counter-application,
such costs to include those incurred by the
engagement of two counsel, whenever so employed; and
(iii) the costs which Ms.
D is liable to pay to Mr D are to be deducted from her half share of
the residue of the joint estate.
(c) In the application
under case number 35926/2016 launched by Ms D against Mr D and
another:
(i)
the application is dismissed;
(ii)
Ms D is to pay the costs incurred by Mr D in opposing the relief
sought in this application, such costs to include those incurred
by
the engagement of two counsel, whenever so employed; and
(iii) the costs which Ms
D is liable to pay are to be deducted from her half share of the
residue of the joint estate.
______________________________
P.A.
MEYER
JUDGE OF THE HIGH COURT
Dates
of hearing: 21-23 August 2017
Date
of Judgment: 23 February 2018
For
Mr D: In person (heads of argument drafted by A Subel SC, assisted by
BM Slon, instructed by Edward Nathan Sonnenbergs Inc.,
Sandton)
Counsel
for Ms D: K Bailey SC (assisted by N Riley)
Instructed
by: Michael Saltz Attorneys, Rouxville, Johannesburg
Counsel
for TCM and Messrs
Da
Silva, Impey and Bhula: J Suttner SC (assisted by P Cirone)
Instructed
by: Roy Stoler Attorneys, Sandton
Counsel
for Mr Hassim: WB Pye
Instructed
by: Attorney Irene Rome, Norwood, Johannesburg