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[2023] ZAECQBHC 61
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Van Der Watt v Schoeman and Others (3393/2022) [2023] ZAECQBHC 61; 2024 (1) SA 531 (ECGq) (12 October 2023)
FLYNOTES:
COMPANY – Oppressive or prejudicial conduct –
Deadlock
–
Applicability
of section 163 to a director or a shareholder confronted with a
deadlock with no reasonable prospect of reconciliation
–
Oppression remedy – Provides locus standi to any shareholder
or director – Conduct complained of is not
only oppressive
but is also unfairly prejudicial to applicant – Such conduct
disregards interests of applicant –
Reports on which open
offer is allegedly premised rely upon incorrect information and
are unreliable – Relief sought
by applicant is competent –
Companies Act 71 of 2008
,
s 163.
SAFLII Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE
DIVISION, GQEBERHA)
REPORTABLE
Case No.
3393/2022
In
the matter between:-
CARIN
VAN DER
WATT
Applicant
and
ADA-MARI
SCHOEMAN
First
Respondent
LEAP
OF FAITH PATENSIE (PTY) LTD
Second
Respondent
GR
FERREIRA
BOERDERY
Third
Respondent
MERWE
VAN DER
WATT
Fourth
Respondent
JUDGMENT
BANDS J:
[1]
Whilst the interpretation and applicability of section 163 of the
Companies
Act, 71 of 2008 (“
the Act
”), may, at
first glance, seem apparent in view of the interpretation of its
predecessor, section 252 of Act 61 of 1973 (“
the old
Companies Act
&rdquo
;); to confine its ambit analogously, would be
to ignore the clear wording of
section 163
and the extensive remedy,
which the legislature must have had in mind when enacting it.
[2]
Primarily,
the applicant seeks relief in terms of section 163 of the Act,
directing the first respondent to purchase the applicant’s
shares and loan account in the second respondent at a fair value;
[1]
alternatively, an order that the second respondent be wound-up in
terms of section 81(1)(d). Ancillary thereto, the applicant
seeks declaratory relief in relation to unauthorised payments made to
and from the second respondent; as well as relief in terms
of section
162 of the Act, declaring the first respondent to be a delinquent
director. The application is opposed by the
first respondent on
narrow grounds, to which I return.
[3]
Central to the dispute, is the applicability of section 163 of the
Act
to a director and/or a shareholder of a company who is confronted
with a deadlock, either in the management of the company, or in
respect of voting power, with no reasonable prospect of
reconciliation. Whilst the oppression remedy, under section 252
of the Old
Companies Act, typically
operated as a mechanism for the
protection of minority shareholders against oppressive and
prejudicial conduct of the majority
shareholders; on a proper
construction of section 163 of the Act, and for the reasons that I
shall come to shortly, the remedy
can be invoked by a director,
qua
director, and/or shareholder,
qua
shareholder, of a company
where the management and/or voting power is divided equally between
them.
[4]
The salient portions of section 163 of the Act read as follows:
“
(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 disregards 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 of a 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 terms of subsection (1), the court may make any interim
or final
order it considers fit, including-
(a)
an order restraining the conduct
complained of;
(b)
…
(c)
…
(d)
…
(e)
an order directing an issue or
exchange of shares;
(f)
an order-
(i)
…
(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 varying 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…”
[5]
Accordingly, the section provides a shareholder or a director with a
remedy
against any oppressive or unfairly prejudicial acts or
omissions of a company or related person, that unfairly disregards
the interests
of a party.
[6]
The remedy, on a plain reading of section 163, contextually, is far
wider
than its predecessor, section 252 of the Old
Companies Act,
which
provided that:
“
(1)
Any member of a company who complains that any particular act or
omission of a company is unfairly prejudicial, unjust or inequitable,
or that the affairs of the company are being conducted in a manner
unfairly prejudicial, unjust or inequitable to him or to some
part of
the members of the company, may, subject to the provisions of
subsection (2), make an application to the Court for an order
under
this section.”
[7]
The
extensive nature of the remedy for which
section 163
provides is
underscored by the inclusion of the element of unfair disregard of
the applicant’s interests.
[2]
In
Utopia
Vakansie-Oorde Bpk v Du Plessis
,
[3]
the concept of interests, although with reference to
section
62
quat
(4)
of the 1926
Companies Act, was
stated to be much wider than the
concept of ‘rights’. Accordingly, the Supreme Court
of Appeal in
Grancy
Property v Manala
,
[4]
in endorsing its earlier decision in
Utopia,
concluded
that there is much to be said for the proposition that section 163 of
the Act must be construed in a manner that will
advance the remedy
that it provides rather than limiting it.
[8]
There is
nothing in the wording of the section itself which suggests that the
remedy is available only to the conduct of a shareholder
or director
who is vested with the power to override a minority vote and there
exists no reason for attributing a narrow meaning
thereto.
Technically, section 163 of the Act provides
locus
standi
to any shareholder or director.
[5]
In
Benjamin
v Elysium Investments & Another
[6]
the court found,
albeit
with reference to section 111
bis
of the 1926
Companies Act:
“
In
every instance it is a question of fact whether the affairs of a
company are being conducted in a manner oppressive to some part
of
the members; and as pointed out by Jenkins, L.J. in Harmer’s
case, at pp 698-699:
“
the
circumstances in which oppression may arise being so infinitely
various… it is impossible to define them with precision.”
I
am consequently unable to accept the argument that
sec. 111
bis
cannot be invoked by a member of a company who shares the voting
control equally with another.
”
[9]
Accordingly, whilst the oppression remedy typically operates as a
mechanism
for the protection of minority shareholders, there exists
no reason why, in an appropriate case, given the particular facts of
a matter, it is not available to a shareholder who can cast precisely
half the votes in a general meeting of a company, such that
the
voting power is equally divided between an applicant and a
respondent. The distinguishing feature between a deadlock
situation and one involving majority shareholders is that a majority
or a controlling shareholder will not generally be granted
relief
under section 163 of the Act on the basis that he or she has the
power to exercise his or her voting power to eliminate
the oppression
and/or the prejudice of which he or she complains. The
difference between the aforesaid situation and the
present is
manifest.
[10]
It has been
suggested
[7]
that it is not
clear how a deadlock per say can satisfy the requirements of
subsections (1)(a) to (c) of section 163. This
approach loses
sight of the inclusion of the words ‘
related
person’
in the sub-sections under discussion. In terms of section 1 of
the Act, ‘
related
’,
when used in respect of two persons, means persons who are connected
to one another in any manner contemplated in section
2(1)(a) to (c).
[11]
In terms of section 2(1)(b) of the Act, an individual is related to a
juristic person if
the individual directly or indirectly controls the
juristic person, as determined in accordance with subsection (2).
[12]
Section 2(2) of the Act reads as follows:
For
the purpose of subsection (1), a person controls a juristic person,
or its business, if-
(a)
in the case of a juristic person
that is a company—
(i)
that juristic person is a
subsidiary of that first person, as determined in accordance
with
section 3(1)(a); or
(ii)
that first person together with
any related or inter-related person, is—
(aa)
directly or indirectly able to exercise or
control the exercise of a majority of the voting rights
associated
with securities of that company, whether pursuant to a shareholder
agreement or otherwise; or
(bb)
has the right to appoint or elect, or
control the appointment or election of, directors of that company
who
control a majority of the votes at a meeting of the board;
(b)
in the case of a juristic person
that is a close corporation, that first person owns the
majority of
the members’ interest, or controls directly, or has the right
to control, the majority of members’ votes
in the close
corporation;
(c)
in the case of a juristic person
that is a trust, that first person has the ability to
control the
majority of the votes of the trustees or to appoint the majority of
the trustees, or to appoint or change the majority
of the
beneficiaries of the trust; or
(d)
that first person has the
ability to materially influence the policy of the juristic person
in
a manner comparable to a person who, in ordinary commercial practice,
would be able to exercise an element of control referred
to in
paragraph (a), (b) or (c).”
[13]
Accordingly, on a proper reading of section 2(1)(b) of the Act, read
together with section
2(2)(d) thereof, an individual is related to a
juristic person if the individual directly or indirectly controls the
juristic person
where the first person has the ability to materially
influence the policy of the juristic person in a manner comparable to
a person
who, in ordinary commercial practice, would be able to
exercise an element of control referred to in section 2(2)(a), (b),
or (c).
Whilst a finding in this regard is dependent upon the
facts of each matter, a deadlock situation can clearly be catered for
within
the ambit of the above sections. For the purposes of
this judgment, I find that the facts fit squarely within the purview
of section 163 of the Act.
[14]
I now turn to the facts of the present matter.
[15]
The applicant and the first respondent, doctors, are the only
directors and registered
shareholders of the second respondent.
The share capital of the second respondent has at all times comprised
of 200 shares,
allotted to the applicant and the first respondent
equally. The second respondent is a domestic company analogous
to a partnership,
commonly referred to as a quasi-partnership (or
owner-managed) company. Implicit in the business arrangement
between the
applicant and the first respondent was that they, as the
shareholders and directors of the second respondent, would
participate
in the management of the second respondent’s
affairs.
[16]
The second
respondent’s principal asset is a commercial property situated
at 994 Fred Ferreira Street, Patensie (“
the
immovable property
”),
from which the medical practice, Gamtoos Vallei Doktors, operated
(“
the
practice
”).
The applicant and the first respondent, together with Alexander James
Barbour (“
Barbour
”),
were the directors and equal shareholders of the practice. The
immovable property was purchased in November 2016
for a purchase
consideration of R1,650,000.00, subject to a suspensive condition
that the second respondent be granted a loan in
the amount of
R1,500,000.00 on or before 21 January 2017. A deposit of
R165,000.00 was funded by way of equal loans in the
amount of
R85,065.00.00 made by the applicant and the first respondent to the
second respondent. The remainder of the purchase
price was
secured by way of a loan obtained by the third respondent from
FNB,
[8]
for which the applicant
and her husband stood surety. The third respondent, in turn,
loaned the necessary capital to the
second respondent. The
immovable property was registered in the name of the second
respondent on 15 August 2017, whereafter
the practice took up
occupation during February 2018 following extensive renovations to
the immovable property.
[17]
The practice, which occupied the major portion of the immovable
property, paid rental in
the amount of R20,000.00 per month to the
second respondent. The following further tenants took up
occupation, paying the
following further rentals (exclusive of VAT):
(i) Tolbos, R1,500.00 per month; (ii) Scheyisa Powerlines, R5,500.00
per month; (iii)
Bay Physio, R2,500.00 per month; and (iv) Tania
Venter Hair Salon, R2,850.00 per month. In addition, the
respective lessees
were responsible for the payment of their pro rata
utility charges.
[18]
The second respondent’s major liabilities, according to its
annual financial statement
for the financial year ending February
2019, consists of loans from the applicant in the amount of
R986,477.00 and from the first
respondent in the amount of
R856,192.00, both of which are unsecured, and a secured loan from the
third respondent in the amount
of R2,135,160.00.
[19]
According to the applicant, the relationship between her and the
first respondent became
strained during the middle of 2020, at which
stage she realised that they would need to go their separate ways.
She obtained
a ballpark valuation of the second respondent during
January 2021, whereafter she informed the first respondent and
Barbour, during
March 2021, that she intended on selling her shares
in the practice. Following a meeting held on 8 April 2021, it
was agreed
that the first respondent and Barbour would purchase the
applicant’s equity for a purchase consideration of R250,000.00,
payable by the first respondent and Barbour in equal proportions of
R125,000.00, in twelve equal monthly instalments from 1 May
2021.
It was further agreed that the applicant would cease being a
shareholder of the practice with retrospective effect
from 31 March
2021. The agreement was recorded in a written agreement of sale
of shares.
[20]
As at 31
March 2021, the tenants of the immovable property and the rentals
(exclusive of VAT) paid by them, in addition to their
responsibility
in respect of their utility charges, were as follows: (i) the
practice, R20,000.00; (ii) Tomsett, R1,500.00; (iii)
Physiotherapists, R2,700.00; (iv) coffee shop, R0;
[9]
and (v) PSG, R5,500.00.
[21]
Notwithstanding the applicant’s resignation as a shareholder of
the practice, she
remained a shareholder and director of the second
respondent.
[22]
Apparent from the applicant’s papers is that shortly after
leaving the practice on
9 April 2021, the first respondent started to
exclude the applicant from the management of the second respondent,
treating it as
her personal fiefdom. The applicant’s
founding papers describe in detail the circumstances in which such
accusations
are made and her continued attempts to convene a
directors’ meeting to discuss various pressing issues, which
attempts were
ignored by the first respondent.
[23]
Whilst I do not propose to discuss the details of the applicant’s
complaints at great
length, the exclusion of the applicant by the
first respondent, in the effective participation in the management of
the second
respondent, is glaringly apparent. The first
respondent has acted unilaterally, and has, on the whole, treated the
second
respondent and its principal asset as her own. She has
concluded and continues to conclude transactions on behalf of the
second respondent without being authorised to do so. Significantly,
the first respondent, in her answering affidavit, elected
not to
traverse the specific allegations made by the applicant in this
regard, nor did she attempt to justify such accusations
other than to
contend that:
“
8.
There has been a long
history between the
Applicant and me regarding the running of the Second Respondent.
During March 2021 the Applicant approached
myself and stated
that she could no longer be involved in the day-to-day running of the
Second Respondent, due to family responsibilities.
9.
It was then decided between myself and the Applicant that she takes a
year sabbatical
leave from the running of the Second Respondent and
that I would be responsible for the running of the Second Respondent.
The Applicant
never returned and failed to resume with her
responsibilities in the running of the Second Respondent and I've
since been running
the business myself.
”
[24]
Not only are the aforesaid allegations expressly denied by the
applicant, but they fly
in the face of the objective, common cause
facts before court.
[25]
Without belabouring the point, the applicant and the first respondent
held a directors
meeting on 8 April 2021, this being a month after
the applicant allegedly approached the first respondent contending
that she could
no longer attend to the day-to-day running of the
second respondent. Moreover, the applicant in numerous
correspondence addressed
to the first respondent during the alleged
sabbatical period, implored upon the first respondent that the
directors are required
to act jointly. She continuously called
for directors’ meetings to be held to no avail. At no
stage did the first
respondent cite the applicant’s alleged
sabbatical in any of the correspondence that was exchanged preceding
the application.
[26]
There can
be no doubt that the applicant has established conduct in the nature
contemplated in section 163 of the Act.
[10]
Put differently, I am satisfied that the conduct complained of is not
only oppressive but that it is also unfairly prejudicial
to the
applicant. At the very least, such conduct disregards the
interests of the applicant.
[27]
On either party’s version, by 31 July 2022, the relationship
between the applicant
and the first respondent had broken down
completely. On 2 August 2022, the applicant’s attorneys
of record addressed
correspondence to the first respondent,
indicating
inter alia
, that the first respondent was
responsible for the demise of the trust relationship between the
applicant and the first respondent
and that her conduct, in relation
to the applicant, constitutes oppressive and unfairly prejudicial
conduct, citing various examples
such as: (i) receipt of the first
respondent of cash payments by certain tenants, which are not paid
into the bank account of the
second respondent; (ii) numerous
unlawful transactions made by first respondent; and (iii) the denial
of the applicant to participate
in the management of the second
respondent. Ultimately, the applicant, through her attorneys of
record, demanded that the
first respondent purchase her shares and
loan account in the second respondent at a reasonable market related
value. To this
end, it was proposed that an independent valuer
be appointed to determine the value of the applicant’s shares
and loan account.
[28]
On 15 August 2022, the first respondent, through her attorneys of
record advised
inter alia
that insofar as the unlawful or
unauthorised transactions are concerned, such payments are not
payments made to the first respondent
but are instead payments that
the first respondent made to the second respondent, which is managed
by her. Apart from the
fact that the first respondent was not
authorised to make loans to the second respondent by way of a
directors’ resolution,
implicit in the first respondent’s
response is that she acknowledges that she usurped the management of
the second respondent
in circumstances where she was never authorised
to do so by the board of directors. The first respondent
suggested that the
applicant obtain her own valuation and that the
parties mediate the dispute.
[29]
Further correspondence was exchanged between the legal
representatives for the applicant
and the first respondent, from
which it is apparent that as of 13 September 2022, the applicant was
advised that the first respondent
had no interest in purchasing the
applicant’s equity in the second respondent and that an
independent valuer be appointed
to determine the value thereof.
Presumably, the first respondent at that stage had in mind that a
third party purchase the
applicant’s equity, if he or she is
interested, bearing in mind the valuation thereof.
[30]
The parties, despite various communications being exchanged between
them during the period
of 13 September 2022 and 18 October 2022, were
unable to resolve the dispute. The application was thereafter
launched during
November 2022.
[31]
Whilst the first respondent denies the applicability of section 163
of the Act on the basis
that the applicant is not an oppressed
minority, she contends that there is no other way to resolve the
current impasse other than
to proceed with the buy-out by herself of
the applicant’s shares, citing that the liquidation of the
second respondent would
be far more prejudicial to the parties.
[32]
Accordingly,
under cover of a letter, dated 12 December 2022, the first respondent
delivered an open offer to the applicant, in
the amount of
R500,000.00 together with ancillary performance, which offer was
premised on two valuation reports obtained by the
first respondent.
The first respondent, relying on
Bayly
and others v Knowles
[11]
as authority, argued that a fair offer destroys the entire basis of
prejudicial conduct, as the offer cures any prejudice.
[33]
On this basis, the first respondents answering affidavit records as
follows:
“
28.
In view of the case law to be relied upon on my
behalf, not only is the background by enlarge (sic) irrelevant, but
also the alleged
prejudicial conduct. For present purposes, I do not
necessarily agree with the factual contentions by the Applicant, in
respect
of both the background and the prejudicial conduct. For
present purposes, I'll concede that the offer is made, due to the
fact
that the cooperation between the Applicant and myself had (sic)
become impossible and that this Honourable Court for those reasons
can assume that it is premised on prejudicial conduct
.
”
[34]
The first respondent further contends that the further allegations
made by the applicant
regarding the various other remedies under the
Act are not viable in the face of the open offer and seeks that the
application
be dismissed with costs and that the open offer, which
she contends to be “
very generous and more than reasonable
”,
be made an order of court.
[35]
Whilst it was argued on behalf of the first respondent that the
present matter was on all
fours with
Bayly and others v Knowles
,
such proposition is misguided.
[36]
In
Bayly
, there existed no cogent reason for Knowles’
rejection of Bayly’s offer. Both in correspondence and
under oath,
Knowles confined himself to the assertion that the offer
was “unacceptable” to him, without tendering an
explanation
for his refusal to take it up. The court found that
his attitude, as manifested in the counter-proposal and in the
argument
before court, was simply a refusal to dispose of his shares
to Bayly, leaving him in control of the company. The court
found
that in the face of the positive assertion by Bayly that his
offer was more than fair to Knowles, which Knowles failed to take
issue with, it was not open to Knowles to contend otherwise.
[37]
The position in Bayly is irreconcilable with the facts of the present
matter. I say
this for the simple reason that the applicant
pertinently takes issue with the reasonableness of the open offer on
the basis that
the reports upon which it is allegedly premised, rely
upon incorrect information; are unscientific; flawed; and are
unreliable.
Detailed reasons for such assertions are traversed
by the applicant, in her replying affidavit, over some 30
paragraphs.
Having given due consideration thereto, read in
conjunction with the reports, I am in agreement with the applicant.
Accordingly,
I cannot accede to the first respondent’s request
to make the open offer an order of court.
[38]
This then
brings me to the question of the nature of the relief sought by the
applicant. The list of orders that a court may
make under
section 163(3) is non-exhaustive and open-ended. Where a court
grants relief to an applicant by way of a direction
that his shares
are to be purchased, the court has an unfettered discretion as to the
method of fixing the price of the shares,
which should be a fair
price therefor, and which should be determined objectively as to the
date at which such price is to be fixed.
Implicit therein is
that a court is empowered to direct that such price be determined by
an objective third person, such as an
independent valuer. The
relief sought by the applicant herein is competent and there exists
no reason why an order in terms
of the draft order 2, barring the
relief in respect of section 162 of the Act,
[12]
should not be made an order of court. The costs of the
application, including the reserved costs of 14 February 2023 are
to
follow the result.
[39]
Accordingly, the following order is issued:
1.
The first respondent be and
is hereby directed to purchase the applicant's shares and loan
account in the second respondent at a
fair value to be determined in
terms of paragraphs 2 to 9.
2.
That the applicant and the
first respondent (“the parties”) are directed to
endeavour to agree upon the appointment
of a practising chartered
accountant of not less than 15 years standing who shall not be the
auditor of any of them, nor have been
previously professionally
engaged in any capacity by any of them, to undertake the valuation of
the shares and loan accounts in
accordance with the directions in
paragraphs 2 to 9, and to determine the purchase consideration
payable for the shares and loan
account of the applicant. In
the event of the parties being unable to so agree within 10 days of
the date of this order the
valuation and determination shall be
undertaken by a Gqeberha based practising chartered accountant of not
less than 15 years standing,
to be nominated by the president or
chairman of the Gqeberha Regional Association of the South African
institute of Chartered Accountants.
3.
The valuer is to make the
determination in respect of the fair value of the shares and loan
account within a period of 30 days from
the date of this order and
shall deliver to all parties a written notice indicating the fair
value of the shares and loan account
of the applicant in the second
respondent.
4.
The costs of the valuer are
to be borne by the second respondent.
5.
In determining the aforesaid
fair value, the valuer shall act as an expert and not an arbitrator,
and:
5.1
the fair value of the shares
and loan account shall be determined with regard to the financial
condition of the second respondent
as at the date that this
application was issued, being the value at which the shares and loan
account would have exchanged between
a willing buyer and willing
seller, neither being under compulsion, each having full knowledge of
the relevant facts and with equity
to both;
5.2
the valuer shall have due
regard to any order that this Honourable Court makes in terms of
paragraph 17 below;
5.3
the price of the shares
shall be determined
pro
rata
the
total issued share capital of the second respondent (having due
regard to any order that this Honourable Court makes in terms
of
paragraph 17 below), that is without any discount for the shares
representing the minority or majority holding and without any
discount on account of any contractual restrictions that might have
been agreed upon between the shareholders, or provided for
in the
memorandum of incorporation on the disposal of the shares other than
as between existing shareholders;
5.4
any costs borne by the
second respondent in respect of this application shall be excluded
from the valuer’s determination,
and the purchase price is
accordingly to be determined as if such costs had not been borne by
it.
6.
Each of the parties
to this application shall fully and timeously cooperate with the
valuer and furnish all information, appropriately
vouched, and all
documentation required by him or her to undertake the valuation and
determination, failing which the valuer is
authorised to make
application through the chamber book to a judge for such further
directions and relief as may be appropriate
7.
the valuer shall have
the following further powers:
7.1
the right to conduct
all investigations necessary and, in particular, to obtain from the
parties or any third party or entity all
information and
documentation considered by the valuer reasonably necessary for the
valuers determination;
7.2
the right to obtain
information regarding the financial affairs from any bank, financial
institution or other entity where monies
may have been invested or to
which/whom monies may be owed by any of the entities relevant to the
determination;
7.3
the rocks to obtain
and call for balance sheets or income statements in respect of any
entity or business relevant to the determination;
7.4
the right to inspect
books of account in respect of any company or entity, including but
not limited to bank statements, paychecks,
deposit books and personal
statement of affairs and liabilities which the valuer considers
relevant for the determination;
7.5
the right to make
physical inspection of assets and take inventories;
7.6
the right to question
any person or party and obtain explanations deemed necessary for the
purpose of making the determination;
7.7
to do anything or to
take any such steps as may reasonably be considered by the valuer to
be relevant to the valuer’s determination,
including the
appointment of an expert valuer to value the assets (including the
commercial property of the second respondent situated
at 994 Fred
Ferreira St. Patensie (“the immovable property”);
7.8
to be entitled to
apply to this court for any further direction that the valuer shall
or may consider necessary in order to perform
his determination; and
7.9
to take into account
any matter which the valuer considers relevant to determining what
the valuer considers to be a fair value
as at the date of the issuing
of this application.
8.
The applicant as well
as the first respondent shall be entitled to forward any documents or
representations to the valuer and shall
be entitled to copies of any
documents or representations made available by the other party and in
respect of which the other party
is entitled to comment to the
valuer.
9.
The determination of
the valuer shall be final and binding on the parties.
10.
Payment of the fair
value of the shares and loan account so determined shall be made
within one month of such determination being
made.
11.
Upon a full discharge
by the party acquiring the shares and loan account, the applicant
shall transfer her shares to the transferee
shareholder (the first
applicant) or the company, as the case may be.
12.
The first and second
respondents are directed to take all reasonable steps to procure the
release of the applicant from any liability
which she may have under
any guarantee which may have been given by her for the second
respondent’s obligations and that,
until such release is
procured, each of the first and second respondents shall be jointly
and severally liable to indemnify the
applicant against such
liability.
13.
The first respondent
is directed to cede the Momentum policy, number 3[…]8, that
she took out on the life of the applicant,
to the applicant.
14.
The applicant is
directed to cede the Momentum policy, number 3[…]1, that she
took out on the life of the first respondent,
to the first
respondent.
15.
The first, second and
third respondents are directed to take all reasonable steps to
procure the release of the applicant from any
liability which she may
have under any guarantee which may have been given by her for the
third respondent’s obligations
(including the suretyship that
she signed in favour of the First Rand Bank limited and her cession
in
securitatem
debiti
of
her Sanlam policy, number 589[…], and Investec policy, number
149[…]) and that, until such release is procured,
each of the
first, second and third respondents shall be jointly and severally
liable to indemnify the applicant against such liability.
16.
The first, second and
third respondents are directed to take all reasonable steps to
procure the release of the fourth respondent
from any liability which
he may have under any guarantee which may have been given by him for
the third respondents obligations
(including the cancellation of the
bond in favour of First Rand Bank over the property of the fourth
respondent situated at 27
Dombeya Street, Wavecrest, Jeffreys Bay;
Erf 5[…], Jeffreys Bay) and that until such release is
procured, each of the first,
second and third respondents shall be
jointly and severally liable to indemnify the fourth respondent
against such liability.
17.
The loans that the
applicant unilaterally made to the second respondent and the payments
that she unilaterally made out of the bank
account of the second
respondent, as reflected in the spreadsheet annexed to the founding
affidavit marked “CW30”,
be and are hereby declared
unauthorised and void, and the chartered accountant appointed as the
valuer, in his determination of
the fair market value of the
applicant’s shares in the second respondent, must ignore all
the loans that the first respondent
made to the second respondent and
all the payments made by the second respondent for the benefit of the
first respondent, Dr Ada-Mari
Schoeman Inc or any other person or
entity related to the first respondent and, insofar as any other
transactions referred to in
“CW30” are concerned, take
into account that these transactions are void and unenforceable and
attribute, where necessary,
market related values of these
transactions. That will include the rent that Schoeman Inc.
pays.
18.
The first respondent
is to pay the costs of this application, including the reserved costs
of 14 February 2023.
I
BANDS
JUDGE
OF THE HIGH COURT
Date
heard:
25 May 2023
Date
of judgment:
12 October 2023
For
the applicant:
Adv T. Zietsman
Instructed
by:
Schoeman Oosthuizen Inc.
167 Cape Road
Mill Park
Gqeberha
For
the 1
st
respondent:
Adv P Jooste
Instructed
by:
Nel Mentz Steyn Ellis Inc
Quinton van der Berg
Attorneys Inc.
132 Cape Road
Mill Park
Gqeberha
[1]
Such value to
be
determined by a practicing chartered accountant of not less than 15
years in the manner set out in the notice of motion.
[2]
FHI
Cassim Contemporary Company Law 2 ed (2012) at 770-1.
[3]
1974
(3) SA 148
(A) at 170H-171D.
[4]
2015
(3) SA 313
at 324 A.
[5]
FHI
Cassim Contemporary Company Law 2 ed (2012) at 683.
[6]
1960
(3) SA 467
(ECD) at 476H and 477A – B.
[7]
In
Henochsberg on the
Companies Act, 71 of 2008
.
[8]
In
the amount of R2,500,000.00 to cover the remainder of the purchase
price in the amount of R1,500,000.00 and to fund extensive
renovations to the immovable property.
[9]
The
coffee shop was not charged rental as the applicant and the first
respondent sought to assist the owner and were of the view
that it
would attract customers and patients.
[10]
Grancy
Property Ltd v Manala
2015
(3) SA 313
(SCA)
Louw
and Others v Nel
2011 (2) SA 172
(SCA).
[11]
[201]
3 All SA 374 (SCA).
[12]
On
the facts before court, I am not satisfied that a case has been made
out for the relief sought in respect of section 162 of
the Act.