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[2022] ZAKZPHC 50
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Venator Africa (Pty) Limited v Bekker and Another (8800/2021P) [2022] ZAKZPHC 50; [2022] 4 All SA 600 (KZP) (16 September 2022)

IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: 8800/2021P
In
the matter between:
VENATOR
AFRICA (PTY) LIMITED

PLAINTIFF
and
MARTIN
BEKKER
FIRST

DEFENDANT
LLOYD
MASON WATTS
SECOND

DEFENDANT
ORDER
The
following order is granted:
1.
The second
defendant’s first exception dated 4 November 2021 is upheld,
with costs.
2.
The
plaintiff’s particulars of claim are set aside.
3.
The plaintiff
is granted leave, if so advised, to file amended particulars of claim
within ten days from the date of the granting
of this order.
JUDGMENT
BEZUIDENHOUT
AJ
Introduction
[1]
The plaintiff,
Venator Africa (Pty) Limited, issued summons against the first
defendant, Mr Martin Bekker, and the second defendant,
Mr Lloyd Mason
Watts, on 8 October 2021, claiming payment in the sum of R41 407
220 against the two defendants, jointly and
severally, the one paying
the other to be absolved.
[2]
The first
defendant filed a plea on or about 18 February 2022. The second
defendant filed his first exception on 4 November 2021,
and his
second exception on 29 November 2021. It is these two exceptions
which came before me as an opposed motion.
[3]
The first
exception is taken on the basis that the particulars of claim fail to
disclose a cause of action. In the second exception,
it is contended
that the particulars of claim are vague and embarrassing.
The
plaintiff’s claim
[4]
It is pleaded
in paras 4 and 6 of the particulars of claim that at all material
times, the defendants were directors of Siyazi Logistics
and Trading
(Pty) Limited (Siyazi). Siyazi conducted business as a clearing and
forwarding agent.
[5]
It is pleaded
in para 7 that during or about 2016, Siyazi contracted with the
plaintiff for the performance of clearing and forwarding
duties by
Siyazi on the plaintiff’s behalf. It was
inter
alia
agreed
that Siyazi would issue disbursement accounts to the plaintiff, which
represented the amounts due by the plaintiff to the
South African
Revenue Services (SARS). The plaintiff would pay the amounts
reflected on the disbursement accounts to Siyazi, who
in turn would
pay the amounts received from the plaintiff to SARS.
[6]
It is further
pleaded in paras 8 to 14 that Siyazi delivered disbursement accounts
to the plaintiff totalling R66 395 006.27,
which the
plaintiff paid to Siyazi. The disbursement accounts constituted a
representation by Siyazi to the plaintiff that the
amounts reflected
were due to SARS by the plaintiff. It is the plaintiff’s case
that Siyazi only paid R31 353 697.27 over
to SARS, which resulted in
SARS raising assessments against the plaintiff for VAT due in the
amount of R34 630 202 and penalties
in the amount of R2 143 774.
The plaintiff pleads that it suffered damages totalling R41 407 220
due to Siyazi’s
short payment to SARS.
[7]
The plaintiff
pleads further in para 15 that the short payment occurred as a result
of fraud and/or theft by Siyazi’s employees
and/or the
defendants.
[8]
With reference
to section 22(1) of the Companies Act 71 of 2008 (the
Companies Act),
the
plaintiff pleads in paras 16 and 17 that Siyazi was reckless,
alternatively grossly negligent, further alternatively that the
business
of Siyazi was conducted with the intention to defraud the
plaintiff or further alternatively for a fraudulent purpose.
[9]
Section 22
of
the
Companies Act, with
the heading ‘Reckless trading
prohibited’, falls under Chapter 2 which is titled ‘Formation,
Administration and
Dissolution of Companies’ and reads as
follows:
‘
22.   Reckless
trading prohibited.
—
(1)  A
company must not carry on its business recklessly, with gross
negligence, with intent to defraud any person or
for any fraudulent
purpose.
(2)  If
the Commission has reasonable grounds to believe that a company is
engaging in conduct prohibited by subsection
(1), or is unable
to pay its debts as they become due and payable in the normal course
of business, the Commission may issue a
notice to the company to show
cause why the company should be permitted to continue carrying on its
business, or to trade, as the
case may be.
(3)  If
a company to whom a notice has been issued in terms of subsection
(2) fails within 20 business days
to satisfy the Commission that
it is not engaging in conduct prohibited by subsection (1), or
that it is able to pay its debts
as they become due and payable in
the normal course of business, the Commission may issue a compliance
notice to the company requiring
it to cease carrying on its business
or trading, as the case may be.’
[10]
The plaintiff
pleads further in paras 18 and 19, with reference to
section 218(2)
of the
Companies Act, that
the defendants, as the directors of
Siyazi, were the guiding minds behind the fraud, alternatively
reckless, and further alternatively
grossly negligent in controlling
the activities of Siyazi.
[11]
It was further
averred in para 20 that the recklessness or gross negligence
manifested in
inter
alia
a
failure to maintain proper records or books of account, a failure to
maintain controls and to reconcile disbursement accounts
and/or a
failure to impose controls that monies paid against disbursement
accounts were paid to the third parties entitled to it.
[12]
Section 218
,
with the heading ‘Civil actions’, falls within Chapter 9
of the
Companies Act, which
deals with
inter
alia
offences
and miscellaneous matters. It reads as follows:
‘
218.
Civil actions
.—
(1)
. . .
(2)
Any person who contravenes any provision of this Act is liable to any
other person for any loss or damage suffered by
that person as a
result of that contravention.
(3)
The provisions of this section do not affect the right to any remedy
that a person may otherwise have.’
[13]
The plaintiff
pleads further in paras 21 and 22 that but for the defendants’
fraud, alternatively recklessness, further alternatively
gross
negligence, the plaintiff would not have been obliged to pay SARS the
amount of
R41 407 220. It accordingly holds the
defendants liable, jointly and severally, in terms of section 218(2),
read with
section 22(1)
, of the
Companies Act for
the aforementioned
amount.
The
first exception – no cause of action
[14]
The second
defendant alleges that
section 22(1)
regulates companies, which are
distinct juristic persons, and therefore does not regulate what
directors, such as the defendants,
must do or not do, nor does it
impose duties on directors. It is alleged that there is no allegation
in the particulars of claim
that
section 22
regulates directors’
conduct.
[15]
It is alleged
that
section 218(2)
finds application where a person breaches a
provision of the
Companies Act. There
is however no allegation in the
particulars of claim that the defendants breached a provision of the
Companies Act.
>
[16]
It is also
alleged that the allegations in the particulars of claim, with
reference to fraud, recklessness and gross misconduct,
mirror the
jurisdictional requirements of
section 22(1)
but that
section 22(1)
does not impose obligations on, and cannot apply to the defendants as
directors.
[17]
It is also
alleged that the obligations and duties of directors are set out in
section 76
of the
Companies Act, with
the available remedies for
breaches set out in
section 77.
The plaintiff, apparently, is
contending for a contravention of
section 77(3)
of the
Companies Act,
but
any claim under that section is confined to
section 77(2)
of the
Companies Act. Section
77(3)
(b)
specifically deals with the liability of directors in respect of
section 22
, and effectively provides for a director who carries on
the business of the company contrary to
section 22
, to be liable for
any loss, damages or costs sustained by the company. It is further
alleged that
section 218(2)
cannot be invoked because when a statute
expressly and specifically creates liability for the breach of a
section, then a general
section in the same statute cannot be invoked
to establish a co-ordinate liability.
[18]
Section 76(3)
of the
Companies Act reads
as follows:
‘
(3)  Subject
to subsections (4) and (5), a director of a company,
when acting in that capacity, must exercise
the powers and perform
the functions of director—
(
a
)
in good faith and for a proper purpose;
(
b
)
in the best interests of the company; and
(
c
)
with the degree of care, skill and diligence that
may reasonably be expected of a person—
(i)
carrying out the same functions in relation to the company as those
carried out by that director; and
(ii)
having the general knowledge, skill and experience of that director.’
[19]
Section 77(2)
of the
Companies Act reads
as follows:
‘
(2)  A
director of a company may be held liable—
(
a
)
in accordance with the principles of the common
law relating to breach of a fiduciary duty, for any loss, damages
or
costs sustained by the company as a consequence of any breach by the
director of a duty contemplated in
section
75
,
76
(2) or
76
(3) (
a
) or (
b
);
or
(
b
)
in accordance with the principles of the common
law relating to delict for any loss, damages or costs sustained
by
the company as a consequence of any breach by the director of—
(i)
a duty contemplated in
section 76
(3) (
c
);
(ii)
any provision of this Act not otherwise mentioned in this section; or
(iii)
any provision of the company’s Memorandum of Incorporation.’
[20]
Section
77(3)
(b)
of
the
Companies Act reads
as follows:
‘
(3)  A
director of a company is liable for any loss, damages or costs
sustained by the company as a direct or indirect
consequence of the
director having—
(
a
)
. . .
(
b
)
acquiesced in the carrying on of the
company’s business despite knowing that it was being
conducted
in a manner prohibited by
section 22
(1).’
[21]
The second
defendant alleges that the particulars of claim do not aver any
breach by the defendants of an obligation imposed on
them by the
Companies Act, in
order to bring them and the alleged loss said to
have been caused by them within the purview of
section 218(2)
, and
accordingly does not sustain a cause of action.
[22]
It is further
alleged that any conduct or omissions on the part of the defendants
could not, on the pleaded case, have caused a
loss to the plaintiff
as it is
inter
alia
pleaded
that there was an agreement between the plaintiff and Siyazi, in
terms of which Siyazi would pay over the amount for the
disbursements
to SARS. It was also pleaded that Siyazi only paid the amount of
R31 353 697.27 to SARS, and that the damages
suffered by
the plaintiff arise from the alleged breach of the agreement by
Siyazi. It was alleged that Siyazi was accordingly
the cause of the
alleged loss.
[23]
It was also
alleged that to the extent that the claim is predicated on fraud, it
was not properly pleaded. The more serious the
allegation, the
greater the need is for particulars to be given which explain the
basis of the allegation, especially when
allegations of bad
faith and dishonesty are made. A general allegation of fraud is not
sufficient to infer liability, and must
be supported by particulars.
[24]
It was further
alleged that the allegations of recklessness or gross negligence on
the part of the second defendant as director
do not sustain a cause
of action as there is no basis in law for the second defendant, as a
separate person from Siyazi, to have
prepared accounts, maintained
controls and the like. The plaintiff did not plead any legally
recognisable obligation on the second
defendant as director to have
maintained
inter
alia
books
of account and controls. At best for the plaintiff, the defendants
were required to ensure that Siyazi conducted itself in
this way.
[25]
It was also
alleged that the allegations pleaded cannot constitute gross
negligence. As far as fault is concerned, it was argued
that there is
a legal continuum, commencing with negligence, proceeding to gross
negligence, recklessness, and culminating in
dolus
eventualis,
which
all embody different standards of conduct. The particulars of claim
do not make out a case for any of the aforementioned.
The
second exception – vague and embarrassing
[26]
It is alleged
that the plaintiff pleads with reference to
section 22(1)
of the
Companies Act, and
in particular pleads the elements of the section,
namely fraud, recklessness and negligence. It is unclear how
section
22(1)
is actionable in consequence of omissions of the defendants as
directors, as
section 22(1)
relates to a company and not to
directors. There is no allegation that
section 22(1)
regulates a
director’s conduct. It is also alleged that
section 22(1)
does
not impose obligations on the defendants as directors but the claim
is set out on the basis that it does, which renders the
claim vague.
The second defendant is embarrassed and prejudiced by the pleading.
[27]
It is further
alleged that the plaintiff pleaded that Siyazi delivered disbursement
accounts during the period 2018 and early 2019,
after which the
plaintiff paid the full amount to Siyazi. The particulars of claim
contain no allegation as to when the plaintiff
made the payments to
Siyazi. It was necessary for the plaintiff to specifically
particularise when payments were made as the summons
was issued in
October 2021. It is alleged that the second defendant is prejudiced
as it is not possible to discern from the pleading
when the plaintiff
contends it made payments, and therefore the second defendant cannot
properly consider whether to plead prescription.
[28]
It is also
alleged that the allegation that the disbursement accounts
constituted a representation by Siyazi to the plaintiff is
vague and
embarrassing as it is unclear how it forms part of the cause of
action. The plaintiff’s claim seems to be based
on statutory
liability, and not on an actionable representation or
misrepresentation. There is also no averment that Siyazi intended
the
plaintiff to rely on the representation or that the plaintiff did so,
as would be expected when a representation is pleaded.
The second
defendant is thus prejudiced by the pleading.
[29]
The lack of
particularity with regard to the allegations of fraud was again
raised, it being alleged that it is vague and that it
is insufficient
to make a general allegation of fraud. The vagueness is compounded by
the allegation that the fraud and/or theft
was on the part of the
employees and/or the defendants. It should
inter
alia
have
been alleged whether the second defendant conspired or acted in
common purpose with employees, as the second defendant should
be able
to understand the case he is required to meet. The second defendant
is embarrassed and prejudiced in pleading.
Legal
principles – exceptions
[30]
Before I
proceed to deal with the contentions made on behalf of both parties,
it may be useful to consider the approach taken by
courts when
considering exceptions.
[31]
In
Living
Hands (Pty) Ltd v Ditz
,
[1]
the court provided an overview of the general principles, as
distilled from case law:
‘
(a)
In
considering an exception that a pleading does not sustain a cause of
action, the court will accept, as true, the allegations
pleaded by
the plaintiff to assess whether they disclose a cause of action.
(b)
The
object of an exception is not to embarrass one's opponent or to take
advantage of a technical flaw, but to dispose of the case
or a
portion thereof in an expeditious manner, or to protect oneself
against an embarrassment which is so serious as to merit the

costs even of an exception.
(c)
The
purpose of an exception is to raise a substantive question of law
which may have the effect of settling the dispute between
the
parties. If the exception is not taken for that purpose, an
excipient should make out a very clear case before it
would be
allowed to succeed.
(d)
An
excipient who alleges that a summons does not disclose a cause of
action must establish that, upon any construction of the particulars

of claim, no cause of action is disclosed.
(e)
An
over-technical approach should be avoided because it destroys the
usefulness of the exception procedure, which is to weed
out cases
without legal merit.
(f)
Pleadings
must be read as a whole and an exception cannot be taken to a
paragraph or a part of a pleading that is not self-contained.
(g)
Minor
blemishes and unradical embarrassments caused by a pleading can and
should be cured by further particulars.’
(Footnotes
omitted)
[32]
Where
an exception arises in respect of the interpretation of statutory
provisions, it was held in
Fairlands
(Pty) Ltd v Inter-Continental Motors (Pty) Ltd
[2]
that
‘the question is not whether the meaning contended for by
the appellant is necessarily the correct one, but
whether it is a
reasonably possible one’.
[33]
Counsel
for the plaintiff, Mr Wallis SC, referred to
Fundstrust
(Pty) Ltd (in liquidation) v Van Deventer
[3]
in his heads of argument, where it was held that as long as
sufficient facts are pleaded from which it can be concluded that a

specific statutory provision applies, it is not necessary to
expressly refer to the section.
The
second defendant’s contentions
[34]
Counsel for
the second defendant, Ms Annandale SC, submitted that the plaintiff
could easily have sued on the basis of Siyazi’s
breach of its
contract with the plaintiff. Instead, the plaintiff placed a
convoluted reliance on
section 218(2)
read with
section 22(1)
of the
Companies Act, as
the basis for its cause of action. No other
sections of the
Companies Act were
disclosed or relied upon. It was
submitted that the plaintiff should at least also have pleaded, and
made reference to the provisions
of
section 214(1)
of the
Companies
Act. Section
214, with the heading ‘False statements, reckless
conduct and non-compliance’ reads as follows:
‘
(1)  A
person is guilty of an offence if the person—
(
a
)
. . .
(
b
)
with a fraudulent purpose, knowingly provided false or
misleading information in any circumstances in which this Act
requires
the person to provide information or give notice to another
person;
(
c
)
was knowingly a party to an act or omission by a company
calculated to defraud a creditor or employee of the company, or
a
holder of the company’s securities, or with another fraudulent
purpose. . .’
The
plaintiff failed to plead any misrepresentation made to it or to SARS
or that it was provided with false information by Siyazi.
[35]
The main
thrust of the argument on behalf of the second defendant however
centred around whether a director of a company can be
held liable
under section 218(2) if the company breaches section 22(1) of the
Companies Act. It
was submitted that two principles were relevant:
(a)
There is a
distinction between a company and its director. A director is not
personally liable for the wrongs of the company; and
(b)
When
a section in the statutes specifically imposes a liability on a
person, liability in respect of that person cannot also arise
under a
more general section. Reliance was placed on
Hlumisa
Investment Holdings RF Ltd and another v Kirkinis and others
[4]
where the following was held:
‘
[29]
Therefore, a claim that alleges that directors are
liable for damages as a result of a breach of
s 76(3)
must be brought
in terms of
s 77(2)
, which specifically creates the liability for a
breach of
s 76(3).
[30]
Where a statute expressly and specifically creates
liability for the breach of a section, then a general
section in the
same statute cannot be invoked to establish a co-ordinate liability;
see
Gentiruco AG v Firestone SA (Pty) Ltd
1972 (1) SA 589
(A)
(1971 BIP 58) at 603. This is the result of the
generalia
specialibus non derogant maxim
in terms of which general
provisions do not derogate from special provisions.’
[36]
It was
submitted that obligations are imposed on directors under
section 76
,
whilst the remedies for a breach thereof are set out in
section 77
of
the
Companies Act, and
that it is where liability must be established
– not under
sections 22
and
218
. The plaintiff has however not
relied on
sections 76
and
77
, and cannot now invoke reliance on them.
The duties owed by a director in terms of
section 76
are furthermore
owed to the company, and not to third parties, and it was submitted
that even if it wanted to, the plaintiff could
not invoke reliance on
these sections.
[37]
Reference
was made to Professor P Delport’s
Henochsberg
on the
Companies Act 71 of 2008
,
[5]
where it was stated that
‘
.
. . it is clear from
s
22
and
s
77
(3) (
b
)
that
a creditor should not be able to institute a claim under
s
22
,
as is the case with
s
424
,
and the possibility for such claim under eg
s 218
(2)
as
contemplated in
Rabinowitz
case
supra
para
22 . . . was excluded in
Hlumisa
.
. .’
I
will deal with
Rabinowitz
[6]
later on as it forms part of a line of cases relied upon by the
plaintiff to support its reliance on
sections 22(1)
and
218
(2) as its
cause of action.
[38]
The
reference to
section 424
, was a reference to the repealed Companies
Act 61 of 1973 (the 1973 Companies Act). Section 424 with the heading
‘Liability
of directors and others for fraudulent conduct of
business’ falls within Chapter XIV, which continues to apply in
respect
of the winding-up and liquidation of companies.
[7]
It reads as follows:
‘
(1)
When it appears, whether it be in a winding-up, judicial management
or otherwise, that any business of the
company was or is being
carried on recklessly or with intent to defraud creditors of the
company or creditors of any other person
or for any fraudulent
purpose, the Court may, on the application of the Master, the
liquidator, the judicial manager, any creditor
or member or
contributory of the company, declare that any person who was
knowingly a party to the carrying on of the business
in the manner
aforesaid, shall be personally responsible, without any limitation of
liability, for all or any of the debts or other
liabilities of the
company as the Court may direct.’
[39]
According to
Henochsberg
,
‘
the
law relating to s 424 of the 1973 Act is relevant when
interpreting s 22, but only in respect of, eg, the meanings

attached to “fraudulent purpose”, “recklessly”
or “intent to defraud” because the ambit of s
22 is
otherwise totally different from that of s 424 of the 1973
Act . .
.
the effect of a company trading in terms of the prohibited conduct is
the possibility of the Commission requiring the company
to cease
carrying on its business or trading [whereas the] effect in terms
of s 424 of the 1973 Act is personal liability
for all or
any of the debts or other liabilities of the company. A director is
liable [in terms of s 77(3)
(b)
]
to the company for any loss, damage or costs arising as a direct or
indirect consequence of allowing trading as prohibited in s
22
(1) . . . In terms of s 22, the Commission will make the
relevant finding, whereas the Court will do so in terms of s

424.’
[8]
[40]
Second
defendant’s counsel also referred me to the provisions of
section 214(1)
(c)
of the Companies Act, as it read before it was substituted by section
119
(a)
of the Companies Amendment Act 3 of 2011, which came into operation
on 1 May 2011. It read as follows:
‘
A
person is guilty of an offence if the person-
(c)
was knowingly a party to-
(i)
conduct prohibited by section 22(1). . .’
It
was submitted that it underscores the legislature’s intention
to exclude personal liability of a director under section
22. In
contrast to this position, section 424(3) of the 1973 Companies Act
ordains that a person who knowingly is a party to the
carrying on of
the business of a company recklessly or with intent to defraud, shall
be guilty of an offence.
[41]
It was
submitted that a further indication of the legislature’s
intention is the fact that
section 64
of the
Close Corporations Act
69 of 1984
expressly makes provision for the liability of its members
for the reckless or fraudulent carrying on of the business of the
close
corporation. There is no equivalent express provision in the
Companies Act. This supports the submission that for a director to
be
held liable, there must be an express provision to that effect. There
is furthermore no analogous provision in the Companies
Act to section
424 of the 1973 Companies Act. It was submitted that the plaintiff
seeks to invoke a section 424 style liability,
but cannot do so.
[42]
It was also
submitted that the language used in section 22(1) does not impose any
obligation or duties on the directors, and that
they therefore cannot
be held liable in terms of this section. Sections 76 and 77 set out
the obligations of the directors and
when they can be held liable.
Section 77 in turn only provides a remedy to the company.
[43]
I
was referred to
De
Bruyn v Steinhoff International Holdings NV and others
[9]
where Unterhalter J made certain obiter remarks regarding sections
22(1) and 218(2) of the Companies Act. In this matter (as in
Hlumisa
supra
)
the shareholders sought relief against certain directors, which of
course differs from the position in the present matter. With

reference to claims by third parties against directors, the following
was said:
‘
[184]
Two cases were cited in support of the proposition that s 218(2) does
impose liability upon directors for contraventions of
the Companies
Act at the instance of third parties. In
Rabinowitz
the court, citing the interpretations of two commentaries on the
Companies Act, found, on exception, that the directors can be
held
personally liable in terms of s 218(2) for acquiescing in or knowing
about conduct that falls within the ambit of s 22(1)
— the
prohibition against reckless trading. In
Sanlam
it
was held that a person induced to enter a transaction could sue for
damages in terms of s 218(2) as a result of the contraventions
by
directors of s 76(3).
. .
.
[190]
. . . Section 22 states that a company must not carry on its business
recklessly, with gross negligence, with intent to defraud
any person
or for any fraudulent purpose. A company contravenes s 22 only if it
carries on its business with one or other of the
specified species of
fault. Any liability that arises under s 22 is determined under the
disciplining concepts of fault to be found
in this provision. No
coherent interpretation would suggest that because s 218(2) provides
for liability without reference to fault,
s 22 can be read to impose
strict liability. On the contrary, fault is constitutive of the
contravention.
[191]
Section 218(2) should not be interpreted in a literal way. Rather,
the provision recognises that liability for loss or damage
may arise
from contraventions of the Companies Act. And so, the statute confers
a right of action. But what that right consists
of, who enjoys the
right, and against whom the right may be exercised, are all issues to
be resolved by reference to the substantive
provisions of the
Companies Act.
[192]
Such an interpretation answers another difficulty that the literal
interpretation of s 218(2) does not. As
Hlumisa
observed,
can s 218(2) be understood to impose liability without the regulating
concepts of fault, foreseeability and remoteness,
and an
undifferentiated conception of permissible plaintiffs? Such an
understanding would require an interpretation of s 218(2)
that gives
rise to wholesale liability at the instance of all persons who
sustained loss or damage as a result of the contravention.
That is to
place a burden of liability and hence risk upon directors so great
that it is hard to imagine who would accept office
on these terms.
And if that is what the legislature intended it would be expected to
have made the imposition of so great a burden
clear. The better
interpretation is that the legislature intended that the specific
requirements of any liability are to be found
in the substantive
provisions of the Companies Act. Section 218(2) has a different
function. It determines the question posed in
Steenkamp
:
contraventions do permit of a right of action. Whether there is a
right of action, who enjoys the right, and on what basis are
all
matters regulated by the substantive provisions of the Companies
Act.’ (Footnotes omitted.)
[44]
Second
defendant’s counsel also made brief submissions on the issues
of fraud, fault and causation in line with what was set
out in the
exceptions.
The
plaintiff’s contentions
[45]
Plaintiff’s
counsel submitted in his heads of argument that on its plain and
unambiguous meaning, section 218(2) encapsulates
a claim by a
creditor of the company, being ‘any other person’ for
damage caused by ‘any person who contravenes
any provision of
this Act’, which must include a director who contravenes the
Act.
[46]
It was
submitted that the exceptions raised by the second defendant were not
novel, having been raised in a number of cases where
actions were
instituted for damages on a similar basis as in the present matter.
[47]
I
was referred to
Rabinowitz
[10]
where the court agreed with the proposition made on behalf of the
plaintiff, namely, that if ‘
a
director is guilty of the offence created by s 214, such director
must therefore be found to have contravened a provision of the
Act
for purposes of s 218(2)’
.
[48]
Earlier on in
Rabinowitz
the following was held:
‘
The
offence created by s 214(1)
(c)
is,
inter alia, in respect of a director who was knowingly a party to
conduct of the company prohibited under s 22. The
section
precludes a director from knowingly being party to a company carrying
on its business with intent to defraud or for any
fraudulent purpose.
This is one of the matters provided for in s 22 and is the primary
complaint of the plaintiff.’
[11]
[49]
The
court referred to
Henochsberg
and
Contemporary
Company Law
where opinions were expressed that section 218(2) provided a remedy
in terms of which
inter
alia
creditors
would be entitled to redress from the company or its directors for
fraudulent or reckless trading.
[12]
[50]
The
court found ‘that a third party can hold a director personally
liable in terms of the Act for acquiescing in or knowing
about
conduct that falls within the ambit of s 22(1)’.
[13]
In reaching this conclusion, the court relied on, and agreed with a
submission made, that ‘
despite
the express liability created in s 77(3) thereof, the legislature did
not intend to preclude a director from knowingly being
a party to
conduct specified in s 22 of the Act’
.
[14]
It was held that the Companies Act
‘
specifically
contemplates that the business and affairs of a company are to
be managed by or under the direction of its board,
it is hard
to conceive of any basis upon which the legislature intended to
prevent a company from acting in the manner provided
for in s 22, but
did not intend to prevent the directors responsible for the
management of the company from acting in that manner’.
[15]
[51]
I
was also referred to
Chemfit
Fine Chemicals (Pty) Ltd v Maake
[16]
where the court followed the approach in
Rabinowitz
and
held the directors personally liable to the creditors of the company.
The court dealt with the matter where the company apparently
traded
under insolvent circumstances as set out in section 22(1)
(b)
of the Companies Act (before it was amended in 2011), and found that
the directors had been trading under insolvent circumstances,
which
was a contravention and which attracted personal liability of the
directors within the meaning of section 218(2).
[17]
The court then held that ‘[a]ny conduct that contravenes a
provision of the Act, catapults any person, including the directors

to personal liability’.
[18]
[52]
Chemfit
was
overturned on appeal before a Full Bench in
Maake
and others v Chemfit Finechemical (Proprietary) Limited
,
[19]
but only on a factual basis, not in respect of its legal approach.
The court held that:
‘
[27]       Section
218 of the CA imposes liability on any person who contravenes any
provision
of the Act and who in so doing caused another person to
suffer a loss or damage. (See
Rabinowitz
v Van Graan
2013 (5) SA
315
(GST) and
Sanlam
Capital Markets v Mettle Manco
[2014]
3 ALL SA 454
(GT). Any person who can sue for loss or
damage in our view will include a creditor of the company.
[28]       Section
218 of the CA provides a general remedy to any person who suffers
loss or
damages as a result of contravention of the Act. However, it
does not specify which contravention the person may sue for. A
creditor
may sue a director of a company in his/her personal capacity
for the loss or damage it has suffered as a result of that
director(s)
actions. Since the section does not specify which actions
may be regarded as contravention of the CA, it follows that the
creditor
who sues must specify which contravention were attributed to
the director(s) and the exact losses or damages with sufficient
particulars.
Sufficient facts should be pleaded to enable the
director(s) to know which case they would meet.’
[53]
The
court found on the facts of the case that the directors did not carry
on the business of the company recklessly or with gross
negligence
(the respondents having relied on a contravention of section 22(1) of
the Companies Act).
[20]
[54]
Counsel
for the plaintiff also referred me to
Blue
Farm Fashion Limited v Rapitrade 6 (Pty) Limited and others
.
[21]
The court dealt with an exception on the basis that the plaintiff was
not entitled, as a third party creditor, to rely on the provisions
of
sections 22(1), 77(3)
(b)
and 77(6) of the Companies Act to hold the directors personally
liable for a debt due to it by the company. The court found that
a
company ‘cannot incur losses, damages or cost without the
actions of its directors’.
[22]
Although section 77(3)
(b)
envisages the directors being accountable to the company, the court
found that the directors acted recklessly with the possibility
of
intent to defraud the plaintiff and could not escape liability. The
court held
inter
alia
that
to find that directors were not liable would lead to absurd
results.
[23]
Such an approach
would create a lacuna, which the legislator would never have
intended.
[55]
I
was also referred to
Meatworld
Factory CC v ET Trading House (Pty) Ltd
.
[24]
It was submitted that the court upheld, at the trial stage, claims
for liability in respect of the director’s acquiescence,
and a
breach of, section 22 of the Companies Act. In this matter, the
plaintiff instituted action against the company as well as
its sole
director, who was also the only shareholder and in charge of its
management. The court however granted an order, absolving
the second
defendant (the director) from the instance, thus the aforementioned
submission is not entirely accurate.
[56]
The court
dealt with
Rabinowitz
and
Chemfit
and
expressed reservations about the soundness of the conclusion in
Rabinowitz
but held
itself bound to it, and proceeded to deal with the matter before it
‘
on
the basis of an assumption that s 22(1) and/or s 77(3) impliedly
prohibits a director from acquiescing or participating
in the
reckless conduct by a company of its business and that such
acquiescence or participation would constitute a contravention
of the
implied prohibition potentially giving rise to liability in terms of
s 218(2)
’
.
[25]
[57]
Prior
to reaching this conclusion, the court also referred to
Gihwala
v Grancy Property Limited
[26]
where Wallis JA dealt
inter
alia
with
a claim in terms of section 424 of the 1973 Companies Act, but in
respect of which a claim in terms of section 77(3) of the
Companies
Act was advanced in the alternative. The following was held in
Gihwala
with
reference to section 77(3):
‘
That
that
section, in this departing from s 424, does not involve a declaration
by the court, but creates a statutory claim in favour
of the company
against a director, imposing liability on the latter for any loss,
damages or costs incurred by the company in certain
circumstances,
including where the director acquiesces in the company engaging in
reckless trading. It is not a provision that
can be invoked to secure
payment to a creditor or shareholder in respect of their claim
against the company or a director.
So the attempt to rely on s 77(3)
must also fail
.’
[27]
[58]
After
analysing the purpose of the Companies Act, the court in
Meatworld
Factory
held as follows:
‘
That
the imposition of personal liability on those controlling a company
which trades recklessly would be a legitimate manner in
which to
promote the aim of good corporate governance, and to protect those
dealing with a company, is no doubt so. It is
however not the
only manner in which this object can, rationally, be achieved.
’
[28]
It
was stated, with reference to
Ebrahim
v Airport Cold Storage (Pty) Ltd,
[29]
that
‘
The
rationale for the imposition of personal liability on those in charge
of an artificial person is considered, with reference
to
s 64(1)
of
the
Close Corporations Act, 69 of 1984
, in
Ebrahim
v Airport Cold Storage (Pty) Ltd. . .
’
[30]
[59]
The court then
proceeded to refer to the remedies available in terms of section 424
of the 1973 Companies Act, where the right of
recourse against the
company’s director will occur in the context of liquidations,
and in terms of section 141(2)
(c)
(ii)
(bb)
of the Companies Act, where a business rescue practitioner, who finds
evidence of reckless trading or fraud, is required to direct

management to take the necessary steps to rectify the matter.
Although not referred to in the judgment, it is important to note

that in terms of section 141(2)
(c)
(ii)
(aa)
,
a business rescue practitioner must forward the evidence to the
appropriate authority (presumably the Commission) for further

investigation and prosecution. The third remedy referred to was the
possibility of declaring a director delinquent if he or she

acquiesced in the company trading recklessly.
[60]
The judge held
as follows:
‘
In
these circumstances the omission of the legislature to expressly
prohibit a director from participating or acquiescing in reckless

trading by a company, on pain of personal liability in terms of s
218, may very well have constituted a deliberate policy choice
.’
[31]
[61]
Counsel
for the plaintiff lastly referred me to
Metro
Minds (Pty) Limited v Pienaar
[32]
where the court had to decide whether the defendant should be held
liable for a debt owed to the plaintiff by the contracting company

(of which the defendant was a director), as a consequence of the
defendant acquiescing in reckless, grossly negligent or fraudulent

conduct of company business as contemplated in section 22(1), read
with section 218 of the Companies Act. The court also had to
decide
whether the defendant should be declared delinquent for acting in
such reckless, grossly negligent or fraudulent manner
in terms of
section 162(5)
(c)
(iv)
(aa)
and/or
(bb)
of the Companies Act.
[62]
The court held
as follows:
‘
[22]
Generally, directors of companies do not act in their personal
capacity but as agents for their company. Where a director
enters
into a contract with a party, it acts on behalf of the company and
not in his personal capacity. In order to prevent the
abuse of the
separate legal personality of a company, the Companies Act provides
in sections 22(1) (read with section 218(2)) and
77(3)(b) for the
personal liability of a director towards a company for reckless or
fraudulent trading. Directors may also be personally
held liable for
any loss, damage or costs sustained by a “third party” as
a direct or indirect consequence of the director
having acquiesced in
carrying on the company’s business despite knowing that it 7 is
being conducted in a manner prohibited
by section 22(1) of the
Companies Act. Where a director acquiesced in such reckless or
fraudulent behaviour as contemplated in
section 22, a court must
declare a director acting in the manner contemplated in s 77(3)(b) to
be a delinquent director in terms
of section 162(5)(c)(iv)(bb) [see s
214(1)(c)]. . .
[23]
Thus, a third party may in terms of section 22 read with section
218(2) and section 77(3)(b) of the Companies Act hold a director

personally liable for acquiescing in reckless, grossly negligent or
fraudulent conduct of company business where such conduct causes

damage to such third party. . .’
[63]
The
court referred to
Ebrahim
and another v Airport Cold Storage (Pty) Ltd
[33]
and stated that the SCA had made ‘
important
observations regarding the abuse of juristic personality in
circumstances where a controlling member (in the present matter
the
defendant in his capacity as director) recklessly use the corporation
instrumentality to promote its own interests. .
.’.
[34]
It is important to note that
Ebrahim
was
decided in the context of a close corporation, and the SCA held
inter
alia
that
the members of the close corporation were correctly found to be
personally liable in terms of
section 64(1)
of the
Close Corporations
Act 69 of 1984
, which expressly provides for such liability.
[64]
The court in
Metro Minds
then found
that
‘
the
defendant caused the contracting company to act in a manner
prohibited by the provisions of section 22(1) of the Companies Act.

Moreover, at all material times the defendant acted in his
representative capacity as director on behalf on the contracting
company
when he conducted business in the way that contravenes the
provisions of section 22(1) of the Companies Act.’
[35]
The
court then proceeded to hold that this was confirmed by the court in
Rabinowitz,
with reference to para 18 of that judgment –
where reference was made to
Contemporary Company Law
and
Henochsberg on the
Companies Act 71 of 2008
, as referred to
above.
[65]
The court
concluded that the defendant was personally liable to the plaintiff
and also declared the defendant delinquent in terms
of
section
162(5)
(c)
(i)
and (iv)
(aa)
and
(bb)
of the
Companies Act (although
it is not clear on what basis the
plaintiff had standing to apply for such relief, bearing in mind the
provisions of
section 162(2)
of the
Companies Act).
>
[66]
Counsel for
the plaintiff submitted that it is clear from the cases relied upon
by the plaintiff that the courts have accepted that
a creditor enjoys
a right as against directors where there are circumstances of fraud
and recklessness. It was also submitted that
the plaintiff has a
reasonably arguable cause of action. He was also critical of the
cases relied upon by the second defendant,
as both
Hlumisa
and
Steinhoff
dealt with
the position of shareholders’ claims against directors.
[67]
Counsel for
the plaintiff made a number of further submissions regarding the
second exception relating to the particulars of claim
being vague and
embarrassing but I will deal with this later if it becomes necessary.
The
second defendant’s contentions in reply
[68]
Second
defendant’s counsel submitted that the line of cases relied
upon by the plaintiff was inconsistent with a principle
of law that
has been established and followed by our courts and in the Supreme
Court of Appeal over a number of years.
[69]
Reference was
made to
Metro
Minds
and
Meatworld.
It was
submitted that in
Meatworld,
the court
attempted to cure a ‘gap’ in the
Companies Act and
what
was held as being a lacuna, is in fact a clear indication of the
legislator’s intention to exclude personal liability
of
directors.
[70]
It was also
submitted that in some of the cases referred to, the court had not
been made aware of amendments to the
Companies Act, with
reference to
inter alia
the
amendment to
section 214(1)
(c)
of the
Companies Act.
Discussion
[71]
Section
19
of the
Companies Act deals
with the legal status of companies. In
terms of
section 19(2)
a person is not solely by reason of being
inter
alia
a
director of a company, liable for any liabilities or obligations of
the company, except where the
Companies Act and
Memorandum of
Incorporation provide otherwise. It is considered to be one of the
cardinal principles and cornerstones of company
law that a company is
considered to be a legal persona, distinct from its members, with its
own separate legal existence.
[36]
[72]
Section 19(3)
of the
Companies Act ordains
in very express terms that ‘[i]
f
a company is a personal liability company the directors and past
directors are jointly and severally liable, together with the

company, for any debts and liabilities of the company’
.
[73]
There is no
equivalent provision in the
Companies Act in
such express terms
dealing with the liability of directors of a private company for any
of its debts and liabilities towards third
parties.
[74]
Section
77
, and in particular
section 77(3)
, deals with the liability of
directors, and sets out the circumstances under which a director is
liable for any loss, damages or
debts sustained by the company. Just
from a plain reading of
section 77(3)
, it is clear that no liability
is accorded to a director in favour of third parties such as
creditors for debts and liabilities
of the company. This much is
clear from what was held in
Gihwala
,
[37]
namely that
section 77(3)
cannot be invoked to secure payment to a
creditor. This is perhaps why the plaintiff in the present matter
before me places no
reliance on
section 77(3)
, as was done in some of
the cases being relied upon such as
Blue
Farm Fashion
and
Metro
Minds
.
[75]
Section 424 of
the 1973
Companies Act provides
in express terms that directors
‘shall be personally responsible’ for all or any of the
debts or liabilities of the
company when the business of the company
had been carried on recklessly or with intent to defraud creditors.
It also expressly
provides that the court has to make such a
declaration, and it can only be done when the company is being
wound-up or is under
judicial management.
[76]
Section 22
of
the
Companies Act, read
as a whole, ordains that ‘[a]
company must not carry on its business
recklessly, with gross negligence, with intent to defraud any person
or for any fraudulent
purpose’,
and if the Commission
has reasonable grounds to believe a company is engaging in such
conduct, it will take the steps prescribed
in subsections (2) and (3)
of
section 22.
[77]
Section 22
contains no express provision that a director will be held liable for
acting in the manner described in subsection (1). A remedy
for
holding a director liable for a loss sustained for acquiescing in the
carrying on of the company’s business in a manner
as set out in
section 22(1)
is available in terms of
section 77(3)
(b)
but, as mentioned before, this remedy is not available to creditors –
it is only available to the company itself.
[78]
As mentioned
above,
section 214
of the
Companies Act sets
out certain actions by a
person which would make that person guilty of an offence – one
of them being if the person is knowingly
a party to an act calculated
to defraud a creditor.
Section 24(1)
(c)
previously made reference to conduct prohibited by
section 22(1)
,
which reference was removed by the legislator as long ago as 1 May
2011 already, the same day the
Companies Act itself
came into
operation.
[79]
In
Rabinowitz,
the
court clearly considered
section 22(1)
(c)
in its original form and referred to this pertinently in para 13, and
then proceeded in para 17 to agree with the submission that
if the
director is guilty of the offence created in
section 214
, such
director must be found to have contravened
section 218(2).
The court
then relied on
Contemporary
Company Law
,
[38]
as authority that directors are personally liable to creditors if
section 22(1)
is breached. The remark by the author of
Contemporary
Company Law
is
made in the context of
section 218(2)
but after having discussed the
amendment to
section 214(1)
(c)
where the legislator removed the reference to
section 22(1).
The
statement made that ‘[c]reditors, in particular, will be
entitled to redress from the company or its directors for fraudulent

or reckless trading’
[39]
is done with no reference to any authorities or any in-depth analysis
or discussion.
[80]
The court in
Rabinowitz
also relied on submissions made regarding the declaration of a
director as delinquent in terms of
section 162(5)
(c)
(iv)
(bb)
if he or she acted in a manner contemplated in
section 77(3)
(a)
,
(b)
or
(c)
.
The court found that
‘
it
is hard to conceive of any basis upon which the legislature intended
to prevent a company from acting in the manner provided
for in
s 22
,
but did not intend to prevent the directors responsible for the
management of the company from acting in that manner’
.
[40]
The
court then simply proceeded to find that ‘
a
third party can hold a director personally liable in terms of the Act
for acquiescing in or knowing about conduct that falls within
the
ambit of s 22(1) thereof’
.
[41]
[81]
I respectfully
disagree with this finding and am of the view that the court failed
to consider the fact that if the legislator had
wanted to make a
director criminally liable for being a party to conduct prohibited by
section 22(1), it would not have amended
the
Companies Act by
removing the reference to
section 22(1)
in
section 214(1)
(c)
.
More importantly, if the legislator intended to hold a director
liable to a third party for acquiescing in the carrying on of
the
company’s business as prohibited by
section 22(1)
or in any
other respects for that matter, it would have said so expressly as it
has done in section 424 of the 1973
Companies Act, and
section 19(3)
of the
Companies Act. The
express provisions in
section 64(1)
of the
Close Corporations Act also
comes to mind in this regard.
[82]
Rabinowitz
set in
motion a number of decisions, accepting it as correct that a creditor
can hold a director personally liable in terms of
section 22(1).
In
each case liability is found by relying, in a convoluted manner, on
sections 22(1)
,
218
(2), and
214
(1)
(c)
(in its original form), and in most cases also with reference to
section 77(3)
of the
Companies Act.
[83
]
The
court in
Chemfit
relied
on versions of
section 22(1)
and
214
(1)
(c)
which had been amended as far back as 1 May 2011. The court found
that the provision of
section 214(1)
(c)
was ‘of cardinal importance’,
[42]
but
section 214(1)
(c)
was referred to as it was in its original version in terms of which a
person was guilty of an offence if he was knowingly a party
to
conduct prohibited by section 22(1). It was also found that liability
in terms of
section 218(2)
ensues as a result of any contravention
and therefore that ‘[s]
uch
liability ensues as a result of any contravention, and therefore such
ordinary common law requirements for liability as fault
or
wrongfulness are dispensed with’
.
[43]
[84]
The
court then proceeded to find ‘refuge’ in the dictum of Du
Plessis AJ in
Rabinowitz
,
[44]
and proceeded to find that ‘
[a]ny
conduct that contravenes a provision of the Act, catapults any
person, including the directors to personal liability
any
conduct that contravenes a provision of the
Companies Act.’
[45
]
[85]
I
respectfully disagree with the court’s findings and
conclusions. It is unfortunate that counsel involved did not bring
the amendments to the
Companies Act to
the court’s attention,
as I am of the view that the reliance placed on the particular
sections as they were, played a major
part in the court reaching the
conclusions it did. As far as the findings on appeal by the Full
Court in
Maake
is
concerned, I respectfully disagree. Although it is a judgment by a
Full Court, it was delivered in another geographical division
of the
High Court. Although such decisions carry persuasive weight, I am not
bound to follow them.
[46]
[86]
As
far as the remainder of the cases relied upon by the plaintiff are
concerned, I am of the view that like in
Rabinowitz,
the
courts attempted to find a way to hold a director liable to a
creditor by reading into the
Companies Act something
which simply is
not there. In
Meatworld
the
court held that ‘
the
imposition of personal liability on those controlling a company which
trades recklessly would be a legitimate manner in which
to promote
the aim of good corporate governance’
.
[47]
One can sense the frustration some judges might feel when it is clear
that a director was up to no good and a creditor ended up
suffering
damages or a huge financial loss. The fact however remains that the
Companies Act does
not make express provision for such liability. It
could never have been the intention of the legislator to provide for
liability
in a manner that would involve a convoluted manner of
interpreting various sections, and then to arrive at a conclusion
that is
still open to doubt, based on how certain sections are
interpreted.
[87]
I find myself agreeing with the remarks made in
Steinhoff
namely
that
section 218(2)
simply ‘recognises that liability for loss
or damage may arise from contraventions of the
Companies Act&rsquo
;,
but what that right is and who enjoys it, is to be found in the
provisions of the
Companies Act itself
.
[48]
This is even more important when considering what was held by the
Supreme Court of Appeal in
Hlumisa
,
with reference to
sections 77(2)
(b)
and
77
(3)
(b)
,
namely that the
‘
provisions
of the
Companies Act make
it clear that the legislature decided where
liability should lie for conduct by directors in contravention of
certain sections
of the Act and who could recover the resultant loss.
It is also clear that the legislature was astute to preserve certain
common-law
principles’.
[49]
[88]
In my view,
the so-called lacuna created by the legislature in not providing
expressly for the liability of directors to other persons,
such as
creditors, for loss or damage suffered, is a clear indication that it
was not its intention to do so, thereby continuing
to recognise what
has been referred to as a foundation of company law.
[89]
I am therefore
of the view that the plaintiff’s claim does not disclose a
cause of action. As a result of this finding, it
is not necessary to
deal with the second exception.
Order
[90]
I make the
following order:
1.
The second
defendant’s first exception dated 4 November 2021 is upheld,
with costs.
2.
The
plaintiff’s particulars of claim are set aside.
3.
The plaintiff
is granted leave, if so advised, to file amended particulars of claim
within ten days from the date of the granting
of this order.
BEZUIDENHOUT
AJ
APPEARANCES
Date
of hearing        :         19
May 2022
Date
of judgment     :         16
September 2022
For
plaintiff   :                     Mr

PJ Wallis SC
Instructed
by:                     Shepstone

& Wylie Attorneys
24
Richefond Circle
Ridgeside
Office Park
Umhlanga
Ridge
Tel:
(031) 575 7543
E-mail:
smith@wylie.co.za
c/o
Shepstone & Wylie Attorneys
1
st
Floor, Absa House
15
Chatterton Road
Pietermaritzburg
(Ref:
JCS)
For
second defendant:       Ms AM Annandale
SC
Instructed
by :                    Grant

& Swanepoel Attorneys Inc.
Suite
1, The Mews
Redlands
Estate
1
George MacFarlane Lane
Wembley
Pietermaritzburg
Tel:
(033) 342 0375
E-mail:
michael@gsalaw.co.za
(Ref:
Michael Swanepoel/Rufaida/02W002321)
[1]
Living
Hands (Pty) Ltd and another v Ditz and others
2013
(2) SA 368
(GSJ) para 15.
[2]
Fairlands
(Pty) Ltd v Inter-Continental Motors (Pty) Ltd
1972
(2) SA 270
(A) at 275G-H.
[3]
Fundstrust
(Pty) Ltd (in liquidation) v Van Deventer
1997
(1) SA 710
(A) at 725H-726B.
[4]
Hlumisa
Investment Holdings RF Ltd and another v Kirkinis and others
2019
(4) SA 569
(GP).
[5]
P
Delport
Henochsberg
on the Companies Act 71 of 2008
(May 2022 - SI 28) at 118(3).
[6]
Rabinowitz
v Van Graan and others
2013 (5) SA 315 (GSJ).
[7]
Paragraph
9 of Schedule 5 of the
Companies Act 71 of 2008
.
[8]
P
Delport
Henochsberg
on the Companies Act 71 of 2008
(May 2022 - SI 28) at 118(2)-118(3).
[9]
De
Bruyn v Steinhoff International Holdings NV and others
2022
(1) SA 442 (GJ).
[10]
Rabinowitz
v Van Graan and others
2013 (5) SA 315
(GSJ) para 17.
[11]
Ibid
para 13.
[12]
Ibid
para 18.
[13]
Ibid
para 22.
[14]
Ibid
para 21.
[15]
Ibid.
[16]
Chemfit
Fine Chemicals (Pty) Ltd v Maake
2017
JDR 1473 (LP).
[17]
Ibid
para 25.
[18]
Ibid
para 36.
[19]
Maake
and others v Chemfit Finechemical (Proprietary) Limited
[2018] ZALMPPHC 71.
[20]
Ibid
para 37.
[21]
Blue
Farm Fashion Limited v Rapitrade 6 (Pty) Limited and others
[2016]
JOL 35613
(WCC).
[22]
Ibid
para 30.
[23]
Ibid
paras 31-32.
[24]
Meatworld
Factory CC v ET Trading House (Pty) Ltd
2019
JDR 1351 (GJ).
[25]
Ibid
para 37.
[26]
Gihwala
and others v Grancy Property Ltd and others
[2016]
ZASCA 35; 2017 (2) SA 337 (SCA).
[27]
Ibid
para 120.
[28]
Meatworld
Factory CC v ET Trading House (Pty) Ltd
2019
JDR 1351 (GJ) para 34.
[29]
Ebrahim
and another v Airport Cold Storage (Pty) Ltd
[2008]
ZASCA 113
;
2008 (6) SA 585
(SCA) para 16.
[30]
Meatworld
Factory CC v ET Trading House (Pty) Ltd
2019
JDR 1351 (GJ) fn 16.
[31]
Ibid
para 35.
[32]
Metro
Minds (Pty) Limited v Pienaar
[2020]
JOL 49546 (GP).
[33]
Ebrahim
and another v Airport Cold Storage (Pty) Ltd
[2008]
ZASCA 113; 2008 (6) SA 585 (SCA).
[34]
Metro
Minds (Pty) Limited v Pienaar
[2020]
JOL 49546
(GP)
para
30.
[35]
Ibid
para 32.
[36]
See
Dadoo
Ltd and others v Krugersdorp Municipal Council
1920
AD 530
at 550–551;
Salomon
v  Salomon & Company Limited
[1897]
AC 22
(HL) at 42–43;
Hlumisa
Investment Holdings RF Ltd and another v Kirkinis and others
[2020] ZASCA 83
;
2020 (5) SA 419
(SCA) para 42.
[37]
Gihwala
and others v Grancy Property Ltd and others
[2016]
ZASCA 35; 2017 (2) SA 337 (SCA).
[38]
F
H I Cassim et al
Contemporary
Company Law
2
ed (2012).
[39]
Ibid
at 587.
[40]
Rabinowitz
v Van Graan and others
2013 (5) SA 315
(GSJ) para 21.
[41]
Ibid
para 22.
[42]
Chemfit
Fine Chemicals (Pty) Ltd v Maake
2017
JDR 1473 (LP) para 28.4.
[43]
Ibid
para 30.
[44]
Rabinowitz
v Van Graan and others
2013 (5) SA 315
(GSJ) para 21.
[45]
Chemfit
Fine Chemicals (Pty) Ltd v Maake
2017
JDR 1473 (LP) para 36.
[46]
F du Bois et al
Wille’s
Principles of South African Law
9
ed (2007) at 90.
[47]
Meatworld
Factory CC v ET Trading House (Pty) Ltd
2019
JDR 1351 (GJ) para 34.
[48]
De
Bruyn v Steinhoff International Holdings NV and others
2022
(1) SA 442
(GJ) para 191.
[49]
Hlumisa
Investment Holdings RF Ltd and another v Kirkinis and others
[2020] ZASCA 83
;
2020 (5) SA 419
(SCA) para 50.