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[2010] ZAWCHC 597
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Ruckert v Ruckert and Others (3795/07) [2010] ZAWCHC 597 (2 December 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case
No.:
3795/07
In
the matter between:
MAXIE
MARGARETH SANDRA RUCKERT
…...........................................................................
Plaintiff
and
HANS
PETER KURT MARTIN RUCKERT
….................................................................
First
Defendant
CHRISTIAN
UWE PAPE
…........................................................................................
Second
Defendant
SUZANNE
WENTZEL PAPE
….....................................................................................
Third
Defendant
WITNEY
PROPERTIES CC
….....................................................................................
Fourth
Defendant
THE
REGISTRAR OF CLOSE CORPORATIONS
…......................................................
Fifth
Defendant
HEYNS
AND PARTNERS INCORPORATED
…............................................................
Sixth
Defendant
JUDGMENT
delivered on the 2
nd
of
DECEMBER
2010
NGEWU
AJ.
1.
The
crucial question for determination in the matter is whether a
Plaintiff, not yet being a member of the fourth Respondent could
legally transfer her members interest in the fourth Respondent to
First, Second and Third Defendants and whether the membership
interest redistribution agreement concluded by the parties is valid.
The
following facts are not in dispute:
2.
In or about 1999 the Plaintiff and the first Defendant, once a
wealthy businessman from Camp's Bay, were married to each other
out
of community of property, which marriage has since been dissolved by
divorce.
3.
Prior to their marriage, and on or about the 25
th
of
November 1997, the parties purchased the immovable property situate
at 1 Donkin Road, Sea Point then held as an asset in the
name of the
Fourth Defendant, Witney Properties CC. The property was to be
registered in the name of the Plaintiff as the sole
member of the
fourth Defendant. The parties agreed to contribute equally towards
repayment of the bond instalments in respect of
the property.
Plaintiff's
100% membership was not registered in her name by the fifth
Defendant (CIPRO) due to an oversight. In 2000 the parties
commenced
renovations to the property. Plaintiff caused her membership
interest to be registered on 12 August 2004.
5.
Whilst Plaintiff and first Defendant were still under the erroneous
impression that she held 100% membership in the fourth Defendant,
Plaintiff and First Defendant entered into an agreement in terms of
which:
(i)
He
would acquire 71% of the member's interest in the fourth Defendant by
virtue of the money he had invested in renovations to the
property;
(ii)
Second
and third Defendants would be given a joint 9% member's interest in
view of the monies they had advanced to the Plaintiff
and first
Defendant in furtherance of renovations, and
(iii)
The
Plaintiff would hold a 20% member's interest in the fourth Defendant.
and
on 18 October 2005, the member's interest in the fourth Defendant
were registered as agreed above.
6.
The
Plaintiff has now approached the Court seeking an order that:
(i)
The registration of the member's interest by the fifth Defendant on
18 October 2005 be set aside, and that her 100% member's
interest in
the fourth Defendant be restored.
7.
Plaintiff
alleged in her Particulars of Claim that the First, Second and Third
Defendants, or the first Defendant acting on behalf
of the second and
third Defendants caused her to sign a CK2 form altering the
membership interest in the fourth Defendant on the
7
th
November
2001 and same was registered on 18 October 2005.
8.
At the time of registration of the member's interest first Defendant
knew or ought to have known that Plaintiff denied or repudiated
the
agreement.
9.
On 7 November 2001 and during March 2004, the Plaintiff was not the
registered owner of any member's interest in the fourth Defendant
and
her signature disposing of her interest at the time was not competent
as she was not the owner of any member's interest. She
was only
competent to resign her member interest after 12 August 2004 when
same was registered in her name.
10.
By way of alternative relief the Plaintiff repudiated or denied any
alleged agreement and claimed that the amended registration
of the
member's interest of 18 October 2005 was induced by
misrepresentation.
11.
Plaintiffs evidence during trial was riddled with many material
contradictions. She denied having signed the CK2 form. Her other
version was that she could not recall seeing the CK2 form or signing
the member's interest part of the form. She denied and at
the same
time agreed that the signature on the CK2 form was hers, or could not
recall if her signature appears on the CK2 form.
She refused to
answer if the signature appearing on the CK2 form was hers or not.
12.
The
Defendants contended that the Plaintiff signed the CK2 (amended
founding statement) voluntarily in terms of an agreement reached
by
all other members with full knowledge of its contents and that the
agreement was valid and binding. All parties laboured under
the
erroneous belief that the member's interest in the fourth Defendant
had been registered in Plaintiffs name.
Plaintiff,
therefore, acted surreptitiously in registering her 100% membership
interest on 12 August 2004 after she had expressly
agreed to dilute
her member's interest in order to secure a loan from second and third
Defendants.
13.
Mr. Van Geens, the attorney at whose office the CK2 form was signed,
testified that the purpose of the CK2 form was fully explained
to the
Plaintiff and she signed it freely and voluntarily after
understanding its contents. That evidence was not challenged by
Plaintiffs counsel. This corroborated the first Defendant's version
in totality.
14.
Section 37
of the
Close Corporations Act, 69 of 1984
allows any
member of a Corporation to voluntarily dispose of his/her member's
interest or a portion thereof to any other person
qualifying for
membership in terms of
Section 29.
Such disposition must be done in
accordance with an association agreement, if any, or with the consent
of every other member of
the Corporation.
Section 29(2)
states that a
person qualifies for membership the moment he is entitled to a
member's interest. (See
Cilliers
et ah
Close
Corporation Service; Issue 35).
15.
There is no specific requirement in the
Close Corporations Act that
the transfer by a member of her/his membership interest must be
registered to be effective. In terms of
Section 15(1)
and (2) any
change in percentage of a member's interest takes effect when the
change is made and not when the amended founding
statement is
registered. Thus, transfer of the member's interest to the First,
Second and Third Defendants became effective at
the time the
agreement was reached. Likewise, the Plaintiff was a holder of a
member's interest at the time she transferred a portion
of her
interest to the First, Second and Third Defendants as she was not a
registered sole member of the Close Corporation. She
had acquired
such membership interest by purchasing the property, being the only
asset fourth Defendant possessed. The transfer
of member's interest
and percentages were reflected in both amended founding statements
(i.e. one reflecting 100% membership by
Plaintiff, and the subsequent
one reflecting redistribution by Plaintiff of the 100% to her and the
first to third Defendants.
16.
A Close Corporation is a juristic person. The assets are held by it
and members are not co-owners of the assets. On transfer
of the 100%
membership interest to the Plaintiff, by the original member or
members of the fourth Defendant, the latter's membership
of the Close
Corporation terminated and thus, the Corporation remained without a
member. The Plaintiff, as transferee of the member's
interest, would
have become the sole member of the Corporation if the amended
founding statement designating her as such was successfully
registered.
17.
There was no evidence led suggesting that any or both transfer
agreements provided for transfer of the membership interest only
upon
registration of the amended founding statements, a situation that
would have postponed or delayed acquisition of the membership
interest itself.
18.
Parties to a contract are bound together in a legal relationship and
the principle of
bona
fides
underlies
our law of contract. An innocent party aggrieved by a major breach
may terminate the contract relationship by cancelling
the contract.
19.
The test to be applied in determining if a party has repudiated the
contract is whether such repudiating party acted in such
a way as to
lead a reasonable person to conclude that he/she did not intend to
fulfill his part of the contract. In
Datacor
International (Pty) Ltd v Intamarket (Pty) Ltd
[2000] ZASCA 82
;
2001
(2) SA 284
(SCA) 294 it was stated:
"Repudiation
is accordingly not a matter of intention, it is a matter of
perception. The perception is that of a reasonable
person placed in
the position of the aggrieved party. The test is whether such
notional reasonable person would conclude that proper
performance (in
accordance with a true interpretation of the agreement) will not be
forthcoming . . . The conduct from which the
inference of impending
non- or malperformance is to be drawn must be clear cut and
unequivocal, i.e. not equally consistent with
any other feasible
hypothesis. Repudiation, it has often been stated, is a serious
matter requiring anxious considerations and
because parties must be
assumed to be predisposed to respect rather that to disregard their
contractual commitments, not lightly
to be presumed."
The
party repudiating must thus disclose an intention no longer to be
bound by the contract.
In
Street
v Bublin
1961
(2) SA 4
(W) at 10 Williamson J stated that the test as to whether
conduct amounts to such repudiation as justifies cancellation is
whether
fairly interpreted it exhibits a deliberate and unequivocal
intention no longer to be bound.
20.
From the above exposition of the law, it is clear that nothing
hindered the acquisition of the member's interest by the second
and
third Defendant's from the Plaintiff in view of the money/loan they
advanced to the Plaintiff and the first Defendant. Most
unfortunately
the Act does not deal specifically with the manner of transfer of a
member's interest. No evidence was led to suggest
that the cession of
the member's interest to the first, second and third Defendants was
irregular. The amount they advances to
Plaintiff and first Defendant
was applied towards renovation of the property, and I cannot reject
the evidence that the agreement
between the parties was that they
would recover their money so invested by way of acquisition of a
percentage member's interest
in the Close Corporation. The evidence
by the Plaintiff that she renovated the property for residential
purposes clearly cannot
stand. She could not come up with any
possible agreement reached to repay the advance amount to the second
and third Defendants.
21.
It is a commercially sound practice to respect sanctity of the
contracts and to enforce contractual obligations. Plaintiff cannot
be
heard to say that she now repudiated the contract many years after
she received/accepted the loan and applied it towards renovation
of
her property.
22.
Thus, Plaintiff has no legal basis for her allegation that the First
to Third Defendants knew or ought to have known that she
denied or
repudiated the contract. She signed the contract freely and
voluntarily knowing fully well what its contents were and
without
misrepresentation or fraud. The contract is therefore a binding one
and First, Second and Third Defendants are entitled
to enforce the
contract by asking for an order for specific performance.
The
Plaintiffs claim is therefore dismissed with costs.
NGEWU,
AJ