Republic of South Africa
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Before: Acting Justice HJ De Waal
Date of hearing: I December 2023
Date of judgment: 21 February 2024
CHARLES JOHANNES SIERTSEMA
and
STONEY MEADOWS INVESTMENTS 27 (PTY) LTD
MEADOWRIDGE INVESTMENTS 10 (PTY) LTD
SPALDING INVESTMENTS 9 (PTY) LTD
ROSELLA INVESTMENTS (PTY) LTD
PETRUS PRINSLOO
DORPSIG (PTY) LTD
NUTILITE (PTY) LTD
THE TRUSTEES FOR THE
TIME BEING OF THE ZANDER ARMIN TRUST
THE TRUSTEES FOR THE TIME BEING
OF THE ZARMIN TRUST
ERF 31477 WELGEDACHT (PTY) LTD
JUDGMENT
Case No: 16845/2022
Applicant
First Respondent
Second Respondent
Third Respondent
Fourth Respondent
Fifth Respondent
Sixth Respondent
Seventh Respondent
Eight Respondent
Ninth Respondent
Tenth Respondent
DEWAALAJ:
Introduction
[!] This matter is about the sale ofa hotel, situated at 107 Dorp Street, Stellenbosch.
[2] The sellers were companies and trusts under the control of the Fifth Respondent, Petrus
Prinsloo. The sellers will be referred to as such and as "the Prinsloo entities". They
are the Sixth, Seventh and Ninth Respondents. When referring to his individual actions,
Fifth Respondent will be referred to as "Prinsloo". As explained below, the sellers fell
out of the picture after selling the Hotel to the buyers.
[3] The buyers were companies under the control of the Applicant, Charles Johannes
Siertsema. The buyers will be refetTed to as such and as "the Siertsema entities".
They are the First to Fourth Respondents. When referring to his individual actions, the
Applicant will be referred to as "Siertsema".
[ 4] The sale dates back to 3 March 2020, when the Siertsema entities first entered into an
agreement to buy the real estate and the business operating the Hotel. I shall refer to
the assets which were bought as "the Hotel".
[5] A number of disputes arose from the sale of the Hotel. I summarise them briefly with
reference to the relief sought by Sie1tsema in the notice of motion.
[6] The first and main dispute is about who owns the Hotel. According to the share
registers, Siertsema owns only 50% of the shareholding of the buyers which now own
and operate the Hotel. This is not in dispute. The dispute is about the other 50%
shareholding in the buyers, which, according to the share registers, vests in Prinsloo.
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The first and main relief sought by Siertsema is that Prinsloo's 50% shareholding be
transferred to him aud formally registered in his name. In other words, Sie1tsema claims
that through his entities he is in fact the 100% owner of the Hotel.
[7] As a first alternative to the main relief, Siertsema seeks an order in terms of s 163 of the
Companies Act 71 of 2008 ("the Companies Act") declaring that the conduct of the
buyers have been oppressive and unfairly prejudicial to Siertsema and that Prinsloo be
directed to purchase his loan accounts and 50% in the buyers, for an aggregate amount
of RIO 140 726.00. Siertsema is further seeking release from any liability which he
may have under any guarantee or surety given to any creditor of the buyers, including
Nedbank Limited ("Nedbank"). In effect Siertsema is saying that if all the shares in
the buyers are not transferred to him (in terms of the main relief sought) then Prinsloo
must buy him out.
[8] In the second alternative to the main relief, Sie1tsema is seeking an order that the buyers
be placed under provisional, and thereafter final, winding-up by the Comt in terms of
sl8l(l)(d) of the Companies Act. In terms of this alternative, Siertsema is claiming
that, if the other claims fall, it is just and equitable to liquidate the buyers.
[9] I should say at the outset that Sie1isema himself only operated the Hotel for a relatively
short period of time and that Prinsloo is now back in charge. This is in circumstances
where Prinsloo officially holds 50% of the shareholding in the buyers and Siertsema
holds 50%.
3
Factual background
(1 OJ During the beginning of 2020, Prinsloo indicated to Siertsema that he was willing to
sell the Hotel for R20 million, which was acceptable to Siertsema. Siertsema
established his entities, the buyers, for this purpose.
[11] On 3 March 2020, the Siertsema entities concluded purchase agreements to acquire the
Hotel from the Prinsloo entities. However, as certain suspensive conditions (which are
irrelevant for present pmposes) were not met by the due date (9 April 2020), the
agreements lapsed. They were, however, reinstated on 20 August 2020. Prinsloo
became a 50% shareholder in the buyers, three days earlier, on 17 August 2020.
[12] The purchase price was R20 million. The Siertsema entities could initially only obtain
funding from Nedbank for Rl O million. Prinsloo and Siertsema accordingly agreed that
the remaining RJO million would be paid in tranches ofR2 million over time.
[13] Nedbank later increased the finance to Rl 1.25 million, leaving R8.75 million to be paid
off by the buyers to Prinsloo over time ( or more accurately and presumably, to his
entities who were the sellers). A loan account in favour of Prinsloo was created in the
accounts of the buyers for the R8.75 million outstanding.
(14] Nedbank indicated in an email of 29 June 2020 that it would require that bonds [of
RI 1.25 million] be registered over the properties of the buyers in its favour and that
Sie1tsema had to sign surety for the debt. Nedbank further insisted that the loan account
[ofR8.75 million] created in favour of Prinsloo be subordinated to it.
[15] I should point out at that this stage that in terms of the sub-ordination agreements,
Prinsloo warranted in favour ofNedbank that his loan accounts had not been ceded or
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subordinated to any third party and that no third party had an interest in the claims. This
is one of the reasons why Prinsloo contended that Nedbank should have been joined to
the proceedings, an aspect which I deal with below.
[16] Transfer of the Hotel to the buyers took place on 13 November 2020. By then Prinsloo
held a 50% interest in the buyers. The reasons for this are in dispute but it is common
cause that that Nedbank insisted that Prinsloo remains involved, at least while the
RI 1.25 million loan owed to the bank by the buyers was still outstanding.
[17] What is disputed are Siertsema's allegations to the effect that:
17.1. The allocation of 50% of the shareholding in the buyers to Prinsloo was
essentially a sham transaction in order to obtain funding from Nedbank.
17.2. It was agreed that once the funding had been obtained and the Hotel properties
had been registered in the names of the buyers, Prinsloo would retransfer the
50% shareholding to Siertsema.
[18] On 13 February 2021, Siertsema attempted to enforce his version of the arrangement
by demanding that Prinsloo retransfer the 50% shareholding in the buyers back to him.
Prinsloo made clear, albeit somewhat later, that he was not prepared to transfer the 50%
shareholding back to Siertsema.
[19] This is the origin of the first dispute. The question is whether the 50% shareholding
registered in Prinsloo's name actually belongs to Siertsema.
[20] The story does not end with the first dispute. After Prinsloo refused to transfer the 50%
shareholding to the Sie1tsema entities, Siertsema decided to extract himself from the
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Hotel. He wanted to recuperate the money invested by him in the Hotel and be released
from the liability (suretyship) to Nedbank.
[21] Prinsloo agreed.
[22] As a consequence, on 9 June 2021, Prinsloo and Siertsema concluded a second sale
agreement in terms of which Sierl:sema agreed to sell to Prinsloo his 50% shareholding
in the buyers against the payment ofR4.25 million as well as any other money (such as
operational expenses while Siertsema was in control of the Hotel) that Siertsema lent
to the buyers. If the two are added together, Siertsema was happy to "walk away" from
the Hotel if Prinsloo paid him R6 350 427.00.
[23] This was agreed. It was agreed, further, that Prinsloo would be appointed as director
of the buyers on 10 August 2021 and that Siertsema would resign as director.
[24] When Prinsloo defaulted on payment in te1ms of the second sale agreement, Siertsema
cancelled it on 28 February 2022.
[25] It does not appear to be in dispute that Prinsloo did not comply with the tenns of the
second sale agreement. Prinsloo, however, disputes that Siertsema was entitled to
cancel the agreement (as opposed to claim specific performance).
[26] The second sale agreement is relevant to the alternative forms of relief claimed by
Siertsema.
[27] Then there is a third dispute. This relates to an amount ofR4.25 million paid in tranches
by Siertsema to Prinsloo or entities under his control during the latter half of 2020.
Siertsema contends that these payments were made pursuant to an agreement in te1ms
6
of which Prinsloo ceded his loan accounts of RS.75 million against the buyers to
Siertsenm for R4.25 million. lhe deal was in effect, according to Siertsema, a reduction
of the purchase price from R20 million to R15.5 million. There is no written document
recording the deal in these terms. Siertsema contends that deal was brokered by
intermediaries, including an attorney, who now refuse to provide the signed agreements
to him.
[28] Prinsloo denies that there was such a transaction. He claims he could not have entered
into such as transaction given the terms of the subordination agreement, refen-ed to
above. According to Prinsloo, what actually happened is that Siertsema agreed to make
a loan of R4.25 million to another entity owned by him, Erf 314 77 Welgedacht (Pty)
Ltd ("Welgedacht"). This was done because it was unclear how long Prinsloo's loan
accounts ofRS.75 million would be tied up. There is support for Prinsloo's version in
the second sale agreement ( dealt with above), which explicitly records that Siertsema
made a loan to Welgedacht and that the latter would provide a schedule to Siertsema on
how and when said loan would be paid off.
[29] The above is the third aspect which is in dispute. It is peripherally relevant to the main
and alternative claims.
[30] As already stated above, from about 10 August 2021 Siertsema has been in charge of
the Hotel and running it without involving Siertsema.
[31] Nedbank subsequently agreed to make Prinsloo a surety and to release Siertsema as
such. This was recorded in a letter dated 25 October 2023.
[32] Accordingly, as things stand:
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32.1. Prinsloo is the sole director of the buyers and is running the Hotel, albeit with
only a 50% share in the buye:IS.
32.2. The buyers are paying off the Rl 1.25 million bond to Nedbank. Prinsloo is the
surety.
32.3. There is a dispute regarding Prinsloo's loan account. Prinsloo claims he is owed
RS.75 million, which loan has been subordinated to Nedbank. Siertsema claims
he bought that loan account of RS.75 millon for R4.25 million paid to
Welgedacht.
[33] I now tum to deal with the three alternative forms of relief sought by Siertsema in the
notice of motion. Before doing so, I briefly deal with the procedural history and the
non-joinder complaint raised by Prinsloo.
Procedural history and non-joinder
[34] After I was allocated the matter, I called a meeting with the parties on
20 November 2024. I felt that there was a need for a meeting as the matter was not ripe
for hearing for two reasons.
34.1. Firstly, Prinsloo applied for leave to file a rejoining affidavit in order to deal
with what he alleged to be new matter raised by Siertsema in his replying
affidavit.
34.2. Secondly, Prinsloo raised a special plea of non-joinder on the basis that Nedbank
had a direct and substantial legal interest in the relief sought by Siertsema in the
matter.
8
[35] At the meeting it was agreed:
35.1 regarding the first issue, that the rejoinder affidavit of Prinsloo be admitted on
condition that Sie1tsema was afforded an opportunity to reply thereto and
agreed; and
35.2 regarding the second issue, that Nedbank would be contacted and provided with
the opportunity to join the proceedings should it so wish.
[36] Nedbank later indicated that it abided the decision of the Court. This disposes, in my
view, of the non-joinder point.
The three alternative forms of relief sought by Siertsema
[37] It will be recalled that the three forms of relief (all in the alternative) sought by
Siertsema are the following:
37.1. That the 50% shareholding in the buyers registered in Prinsloo's name be
transfeJTed to Siertsema.
3 7 .2. In the alternative, that the conduct of the buyers as represented by Prinsloo be
declared to be oppressive and unfairly prejudicial to Siertsema and/or that such
conduct unfairly disregarded Siertsema's interests and that, pursuant to sl 63 of
the Companies Act, Prinsloo be directed to purchase Siertsema's shares in the
buyers for an amount ofRl0 140 726.00.
37.3. In the further alternative, that the buyers be placed under provisional and
thereafter final winding-up pursuant to s81 (] )( d) of the Companies Act.
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[38] I deal with each of these claims in tum.
(i) Siertsema's claim to Prinsloo's 50% shareholding
[39] This claim is based on an arrangement which Siertsema claims existed alongside the
first agreement of sale in terms of which the 50% shareholding that Prinsloo had in the
buyers would be transferred back to Siertsema once the Rl 1.25 million loan had been
obtained from Nedbank.
[40] At the hearing I raised with both Mr HN De Wet, who appeared for Siertsema, and
Mr J Van Dorsten, who appeared for Prinsloo, that, as a matter oflaw, the first purchase
agreement and whatever arrangements made around it were replaced by the second sale
agreement of June 2021 in terms of which Siertsema was to exit in exchange for a
release from his suretyship obligations and the cash amount ofR6 350 427.00. In other
words, I suggested that the second sale agreement was in effect a compromise1 which
extinguished the pre-existing rights and obligations of the parties and replaced them
with a fresh contractual regime in terms of which Siertsema was to be paid
R6 350 427.00 and was to be released from the suretyship. The latter happened but the
fom1er not. Even though there is a dispute as to whether Siertsema could cancel due to
1 See the following succinct description of the nature of a compromise in Contract: General Principles by
Lubbe, Van Huyssteen, Reinecke & Du Plessis (6 ed, 2020):
"14.47 Compromise (settlement, transactio) is an agreement whereby a dispute-which may or may not
involve litigation - characterised by uncertainty as to the existence or terms of a legal relationship is
settled by the parties, who agree to regulate their relations in a particular way, often by creating a new
set of obligations between them.
14.48 The purpose of a compromise is to terminate uncertainty and to avoid the inconvenience, costs and
risk inherent in resorting to other methods of resolving disputes. It follows that, unlike novation, a
compromise does not depend on the existence of a valid original obligation between the parties. In fact,
even if nothing is due, a settlement may still fulfil a purpose by avoiding litigation.
14.51 Substantively, a compromise extinguishes any legal relationship that may previously have existed
between the parties. A compromise brings legal proceedings already instituted to an end and bars further
legal proceedings in respect of the original, disputed cause of action. On this basis, and because a
compromise does not depend on the original cause of action, a party sued on a compromise is not entitled
to 'go behind the agreement' and raise defences to the original cause of action.n
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non-payment, Siertsema could certainly enforce the second sale agreement and claim
paymcrn vf the outstanding amount to him. On the face of it, that claim has not
prescribed and even if it did that would not revive the original claims that were
compromised.
[ 41] Both counsel seemed to agree with my analysis but they also agreed that as the point
was not raised by either of the parties they represent, it was no open for me to decide
the matter on this basis. I accept this, but for reasons set out below, the fact that
Siertsema has a simple and straightforward contractual exit claim for an agreed sum of
R6 350 427.00 is not itTelevant to the matter, and particularly not to the alternative
claims. I deal with this aspect below, but given the second sale agreement, it can hardly
be said that Siertsema is trapped in an abusive atTangement from which he cannot
escape.
[42] I now reve1i to Siertsema·s claim for 50% of the shareholding in the buyers registered
in Prinsloo' s name.
[43] The main point made by Siertsema's counsel, both in his heads of argument and in oral
argument, is that:
43.1. The parties agreed that the Hotel was worth R20 million.
43 .2. That is the amount that Prinsloo received.
43.3. More particularly, Prinsloo and/or his entities received the RI 1.25 million from
Nedbank pursuant to a mortgage loan and a loan claim ofR8.75 million against
the buyers, totalling R20 million.
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43.4. There could be no conceivable basis for Prinsloo holding on to 50% of the
shareholding when he rncci vc.:l the full purchase price of R20 million.
43.5. If Prinsloo could hang on to the 50% shareholding in the buyers it would mean
that the purchase price was actually not R20 million, but R40 million.
[ 44] Prinsloo disagrees and claims that he and Siertsema are equal shareholders and that they
each own 50% of the shareholding in the buyers. Prinsloo contends that:
44.1. Nedbank's requirement that 50% of the shareholding remains with him was a
reasonable requirement imposed by Nedbank before it would approve the
parties' application for finance. Prinsloo had the experience of running the
Hotel, which gave comfort to Nedbank.
44.2. It must be borne in mind that the full purchase price for the Hotel was not paid
by the buyers. The balance of the purchase price (ultimately R8.75 million) was
funded by a vendor loan from Prinsloo. It made sense for him to continue to
hold the 50% shareholding in the buyers until that vendor loan was repaid.
44.3. It is therefore not c01Tect that Prinsloo received the full R20 million for the
Hotel. Prinsloo received Rl 1.25 million free of obligations (at least for the
period until he replaced Siertsema as the surety) but the balance ofR8.75 million
he lent to the buyers and his loan accounts were subordinated to Nedbank. From
a practical perspective this meant that Prinsloo would only receive the
R8.75 million after Nedbank had been repaid its Rl 1.25 million bond.
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44.4. Prinsloo is clearly going to wait a long time for the R8.75 million. Prinsloo is
also now the surety for the RI 1.25 million bond ;with Ncdbank. All that
Siertsema paid is the R4.25 million which was paid to Welgedacht.
44.5. Siertsema's version would constitute a fraud on Nedbank and a breach of
Prinsloo's obligations to Nedbank in respect of the loan insubordination.
[45] I am inclined to agree with Prinsloo's version. The matter can be approached from
another angle: What did Siertsema actually pay for the Hotel? Subject to him becoming
surety, Siertsema obtained the Rl 1.25 million from Nedbank and the rest from Prinsloo
through vendor financing. \Vhy would Prinsloo agree to sell I 00% of the shareholding
without payment, at least not payment in the immediate future, of 43.75% of the
purchase price? A large chw1k of the purchase price came in the form of a vendor loan,
to be paid off only after the bond was paid. It made commercial sense for Prinsloo to
retain 50% of the shareholding until the amount of R8. 75 million was repaid to him.
That would be long into the future, which is why Sie1tsema paid the R4.25 million to
Welgedacht. That is actually the only amount that Siertsema paid for his 50% of the
Hotel.
[46] Of course, the test is not whether I regard Prinsloo's version as more plausible than
Siertsema's version. The question is whether Prinsloo's version is palpably
implausible, far-fetched or so clearly untenable that it can safely be rejected on the
papers. 2 This is clearly not the case here. It made commercial sense for Prinsloo to
2 Plascon-Evans Paints Ltd,, Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634 ~ 635.
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retain 50% of the buyers until his loan was repaid. Furthermore, Siertsema's version
would amount to a fraud on Nedbank. Fraud is not easily inferred.3
[47) For these reasons, the first claim by Siertsema for the transfer of the 50% shareholding
in the buyers from Prinsloo to him is dismissed.
(ii) The claim in terms of s 163 of the Companies Act
[48) Section 163(1) and (2) of the Companies Act provides as follows:
"163 Relief from oppressive or prejudicial conduct or from abuse of separate
juristic personality of company
(1) A shareholder or a director of a company may apply to a court for relief if-
(a) any act or omission of the company, or a related person, has had a result
that is oppressive or unfairly prejudicial to, or that unfairly disregm-ds the
interests of, the applicant;
(b) the business of the company, or a related person, is being or has been carried
on or conducted in a manner that is oppressive or unfairly prejudicial to, or
that unfairly disregards the interests of, the applicant; or
(c) the powers ofa director or prescribed officer of the company, or a person
related to the company, are being or have been exercised in a manner that
is oppressive or unfairly prejudicial to, or that unfairly disregards the
interests of, the applicant.
(2) Upon considering an application in te1ms of subsection (I), the court may make
any interim or final order it considers fit, including-
(a) an order restraining the conduct complained of;
(b) an order appointing a liquidator, if the company appears to be insolvent;
3 See Gilbcy Distillers & Vintners (Pty) Ltd v Morris NO and Another 1990 (2) SA 217 (SE) at 225.T - 226A
with reference to Gates v Gates 1939 AD 150 at 155.
14
( c) an order placing the company under supervision and commencing business
rescue proceedings in tem1s of Chapter 6, if the court is satisfied that the
circumstm1ces set out in section 131(4)(a) apply;
( d) an order to regulate the company's affairs by directing the company to
amend its Memorandum of Incorporation or to create or amend a
unanimous shareholder agreement;
( e) an order directing an issue or exchange of shares;
( f) an order-
(i) appointing directors in place of or in addition to all or any of the
directors then in office; or
(ii) declaring any person delinquent or under probation, as contemplated
in section 162;
(g) an order directing the company or any other person to restore to a
shareholder any part of the consideration that the shareholder paid for
shares, or pay the equivalent value, with or without conditions;
(h) an order vmying or setting aside a transaction or an agreement to which the
company is a party and compensating the company or any other party to the
transaction or agreement;
(i) an order requiring the company, within a time specified by the court, to
produce to the court or an interested person financial statements in a fonn
required by this Act, or an accounting in any other form the coUit may
dete1mine;
G) an order to pay compensation to an aggrieved person, subject to any other
law entitling that person to compensation;
(k) an order directing rectification of the registers or other records of a
company; or
(1) an order for the trial of any issue as determined by the court."
[49] Counsel for Siertsema relies on the interpretation of the predecessor to s163 (s252 of
the Companies Act) in De Sousa v Technology Corporate Management {Pty) Ltd
2017 (5) SA 577 (GJ). Siertsema's counsel contends that certain legal principles can
15
be distilled from this case. They are that a shareholder or a director of a company may
apply to Court for reliefif:
49.1. acts or omissions from a company or a related person has had a result that is
oppressive or unfairly prejudicial or unfairly disregards the interests of the
applicant;
49.2. the business of the company, or a related person, is being or has been carried on
or conducted in a manner that is oppressive or unfair prejudicial to, or that
unfairly disregards the interests of the applicant; or
49.3. the powers of a director or prescribed officer of the company, or a related person,
are being or have been exercised in a manner that is oppressive or unfairly
prejudicial to, or that unfairly disregards the interests of the applicant.
[ 50] Siertsema contends that he is entitled to the relief in the notice of motion, which is that
his 50% shareholding should be bought by Prinsloo for RIO 140 726.00 because:
50.1. Prinsloo refuses to retransfer the shares to Sietsema despite the fact that he is
not entitled to such shares;
50.2. Prinsloo is not a surety, only Siertsema [it is common cause that this changed
and that Prinsloo is now a surety and Siertsema not];
50.3. Prinsloo is not supposed to be sole director or a director at all;
50.4. Prinsloo has failed to properly attend to the tax and corporate affairs of the
buyers; and
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50.5. Prinsloo excludes Siertsema from the management of the buyers.
[51] Based on the above, Siertsema contends that he has established that Prinsloo 's conduct
is oppressive, unfairly prejudicial to, and unfairly disregards his interests as a
shareholder. Siertsema further contends that there is no reason why he, as a 50%
shareholder, should not be involved in all the major decisions of the buyers. Siertsema
claims that Prinsloo is just doing "what he wants".
[52] Prinsloo's counsel, on the other hand, contends that Siertsema is also not entitled to
relief in terms of sl 63 of the Companies Act as he has not been excluded from the
management of the companies but agreed to resign as director pursuant to the second
sale agreement. It is accordingly by agreement that Prinsloo is now the sole director of
the buyers. Reference is made, in this regard, to an email from Siertsema, stating that
his attorney requested him not be involved with the administration and finances of the
Hotel for the duration of the litigation.
[53] Prinsloo's counsel fu1ther points out that exclusion from management is only regarded
as oppressive or unfairly prejudicial if the (usually minority) shareholder is not being
offered a reasonable opportunity to withdraw his or her capital. This makes it unfair.4
That is not the case here, as Siertsema can withdraw by enforcing the second sale
agreement.
4 Visser Sitrus {Ply) Ltd v Goede Hoop Sitrus (Ply) Ltd and Others 2014 (5) SA 179 (WCC) at para 55.
"What is important to emphasise, however, is that it is not enough for an applicant to show that the
conduct of which he complains is 'prejudicial' to him or that it 'disregards' his interests. The applicant
must show that the prejudice or disregard has occurred 'unfairly'. 'Oppression' likewise connotes an
element at least of unfairness if not something worse."
17
[54] I agree with the submissions of Prinsloo's counsel. The complaint by Siertsema is in
effect that Prinsloo took the advantage of the settlement contained in the second sale
agreement by becoming a director without paying the agreed amount for Siertsema to
exit. For that breach Sie1tsema has a clear contractual remedy and I cannot see how, in
these circumstances, reliance can be placed on sl63 of the Companies Act. If that was
the case, then any contractual dispute between shareholders would fall under s 163 of
the Companies Act. I should add that the failure to timeously attend to the buyers' tax
affairs can hardly on its own justify an order under s 163 of the Companies Act. A full
explanation for the delay was in any event given by Prinsloo. The delay with the tax
affairs has to do with the hand over from Siertsema to Prinsloo after the former resigned
as director. It is understandable that the hand over caused delay.
[55] Reliance was also placed on sl61 of the Companies Act by Siertsema in the founding
affidavit. The section provides as follows:
"161 Application to protect rights of securities holders
(]) A holder of issued securities of a company may apply to a court for-
(a) an order determining any rights of that securities holder in terms of
this Act, the company's Memorandum of Incorporation, any rules
of the company, or any applicable debt instrument; or
(b) any appropriate order necessary to-
(i) protect any right contemplated in paragraph (a); or
(ii) rectify any harm done to the securities bolder by-
(aa) the company as a consequence of an act or omission that
contravened this Act or the company's Memorandum of
Incorporation, rules or applicable debt instrument, or
violated any right contemplated in paragraph (a); or
18
(bb) any of its directors to the extent that they are or may be
held liable in terms of section 77.
(2) The right to apply to a court in terms of this section is in addition to any
other remedy available to a holder of a company's securities-
(a) in terms of this Act; or
(b) in terms of the common law, subject to this Act."
[56] Counsel for Prinsloo contends that Siertsema's claim falls outside the provisions of
sl 61 (1) of the Companies Act in that it concems a contractual dispute between
shareholders and not the detem1ination of Siertsema' s rights as a security holder in
terms of the Companies Act; the memorandum or rules of the companies; or any debt
instrument.
[57] I agree with this submission.
[58] For these reasons, there is no merit in the second (altemative) claim and it should be
dismissed.
(iii) Should the buyers be liquidated?
[59] It is common cause that the buyers are factually and commercially solvent. For this
reason, Siertsema is applying in terms of s8 l of the Companies Act for the winding-up
of the buyers on the ground that it is just and equitable to make such an order. 5 In this
5 The relevant section provides as follows:
81 Winding-up of solvent companies by court order
(I) A court may order a solvent company to be wound up if-
( d) the company, one or more directors or one or more shareholders have applied to the court for
an order to wind up fhe company on the grounds that-
(i) the directors are deadlocked in the management of the company, and the shareholders are
unable to break the deadlock, and-
(aa) irreparable injury to the company is resulting, or may result, from the deadlock; or
(bb) the company's business cannot be conducted to fhe advantage of shareholders
generally, as a result of the deadlock;
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regard, reference is made by Siertsema to five categories of cases where a court may
liquidate a company on just and equitaule grounds. These were enunciated in the matter
of Rand Air v Ray Bester Investments (Pty) Ltd 1985 (2) SA 345 (W) at 3490.
[60] I need not dwell on these categories. In the founding affidavit Siertsema devotes little
more than one page to this leg of his case. Siertsema essentially contends that the
manner in which Prinsloo becan1e the sole director and his refusal to retransfer his
shares to Siertsema constitute grounds for liquidation on just and equitable grounds.
[61] Prinsloo's counsel, on the other hand, emphasizes again that Siertsema voluntarily
withdrew from the business. For this reason, there is no deadlock in the management
of the buyers as Prinsloo is the sole director and responsible for the management. Also,
that the dispute between Siertsema and Prinsloo has not had a negative effect on the
business operations of the buyers. Furthermore, Prinsloo recognises Siertsema's rights.
On 21 January 2022, Siertsema wrote an email to Prinsloo in which he reminded the
latter that of every RI profit, 50% belongs to Sie1tsema. Prinsloo accepts that this is
true.
[ 62] Prinsloo' s counsel further refen-ed to the matter of Apco Africa (Pty) Ltd v Apco
Worldwide Inc. 2008 (5) SA 615 (SCA) at para [17], which basically holds that
equitable considerations may make it just and equitable to wind up a group of
companies in circumstances where the shareholders operate as a partnership with both
participating in the business and there is a breakdown in confidence between them. This
(ii) the shareholders are deadlocked in voting power, and have failed for a period that includes
at least tvvo consecutive annual general meeting dates, to elect successors to directors
whose terms have expired; or
(iii) it is otherwise just and equitable for the company to be wound up;"
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kind of situation may make it just and equitable to wind up the company, especially
when it is not possible for one of the partners to remove his stake and go elsewhere.
[63] As already stated, there is a perfectly acceptable second sale agreement in place which
provided for Siertsema to exit at a specified price. Rather than enforcing that
agreement, Siertsema is now trying to invoke s8 l of the Companies Act quite
unnecessarily. That section cannot possibly find application in these circumstances.
[64] For these reasons, the third (alternative) claim falls to be dismissed.
Order
[65] Siertsema contends that he is entitled to the wasted costs of a chamberbook application
which was launched when Prinsloo's answering affidavit was not filed in time. I had
regard to the papers and I believe that the reason for the delay was properly explained.
Ultimately it was agreed that Prinsloo could file his answering papers by
6 February 2023. Siertsema's replying affidavit was then filed late. Prinsloo was thus
not the only party that filed out of time. In the circumstances there is no justification
for a separate order regarding costs for the late filing of the answering affidavit.
[66] I also do not believe that the fwther affidavit of Prinsloo relating to the non-joinder of
Nedbank was unnecessary. Prima facie there was merit on the point and the filing of
the affidavit then resulted in Nedbank confirming that it was not going to get involved.
[67] Ultimately I could see no reason why costs should not follow the result.
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[68] In the circumstances the following order is m ade: "The application is dismissed with
costs."
A cting Jud ge of the High Court
Cap e TO\.VD
21 February 2024
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APPEARANCES
Applicant's connsel: Naude De Wet
Applicant's attorneys: Werksmans Attorneys
Fifth Respondent's counsel: J Van Dorsten
Fifth Respondent's attorneys: Michalowsky Geldenhuys Attorneys
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