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[2022] ZAMPMBHC 75
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Petersen and Others v Billingham and Others (2896/2021) [2022] ZAMPMBHC 75 (12 October 2022)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
MPUMALANGA
DIVISION (MAIN SEAT)
Case
Number: 2896/2021
REPORTABLE:
YES/ NO
OF
INTEREST TO OTHER JUDGES: YES/NO
REVISED.
In
the matter between:
PETERSON,
MERVYN HILTON,
N.O.
First Applicant
PETERSON,
MARY-ANNE,
N.O.
Second Applicant
ERIKSSON,
DONALD GORDON,
N.O.
Third Applicant
In
their capacities as trustees of the PETERSON
TRUST
IT 401/84
and
BILLINGHAM,
MARGARET JESSIE N.O.
First Respondent
BILLINGHAM,
NATHAN
N.O.
Second Respondent
JACOBS,
PITER MULLER
N.O.
Third Respondent
In
their capacities as trustees of the BILLINGHAM
TRUST
IT 402/84
RENDEZVOUS
ESTATES (PTY) LTD
Fourth Respondent
(Registration
Number 1991/004254/07
This
judgment will be delivered electronically by distributing same by way
of email to the parties. In addition, the judgment shall
be sent to
SAFLII for publication on its website. The judgment shall be deemed
to be delivered at 09:00 on 12 October 2022.
JUDGMENT
Roelofse
AJ:
INTRODUCTION
[1]
This
is an interlocutory application in terms of the provisions of Rule
6(5)(g) of the Uniform Rules of Court (the Rule 6(5)(g)
application).
The applicants in the Rule 6(5)(g) application are the trustees of
the Peterson Trust. The first to third respondents
are cited in their
capacities as the trustees of the Billingham Trust.
[1]
[2]
The fourth respondent is a company
with limited liability. The company owns farmland estimated at R 55
million. The Peterson Trust
holds 45.5% of the shares in the company.
The Billingham Trust holds the remainder of the shares. Prior to
1997, another trust,
the Wilson Family Trust, held 9% of the shares
in the company and the Peterson and Billingham Trusts each held 45.5%
of the shares
in the company.
[3]
The relief that is sought in the
main application is against the company.
LITIGATION
The
main application
[4]
In
the main application, the Peterson Trust seeks specific performance
of a term in the company’s Articles of Association
in terms
whereof the shareholders have a right of pre-emption in the event any
shareholder wishes to sell its shareholding in the
company.
[2]
In addition, the Peterson Trust seeks ancillary relief pursuant to
the order for specific performance and costs in the event the
respondents oppose the application.
[3]
[5]
The Peterson Trust alleges in the
main application that when the Wilson Family Trust sold its
shareholding in the company to the
Billingham Trust (the sale) it did
so in breach of clause 14.2 of the company’s Articles of
Association because the Peterson
Trust was not given the right to
pre-emption to exercise and was also unaware of the sale.
[6]
In the Billingham Trust’s
answering affidavit, Ms. Jessie Margaret Billingham, who is a trustee
of the Billingham Trust, alleges
that the Peterson Trust was aware of
the sale and attaches to her answering affidavit a purported
resolution by the company authorising
the sale (Annexure “M9”).
From the resolution, it appears that Mr. Mervin Hilton Peterson, who
is a trustee of the
Peterson Trust and director of the company,
together with the other directors being Mr. I M Billingham and Mr. A
J Wilson met on
2 April 1997 and resolved to sell the Wilson Trust’s
shares to the Billingham Trust. Three signatures appear on the
purported
resolution.
[7]
In its replying affidavit, the
Peterson Trust denies that it was aware of the sale when the sale was
concluded and alleges that
Mr. Peterson was not a signatory to the
resolution. Mr. I J Billingham and Mr. A J Wilson, who purportedly
co-signed the resolution,
has passed away.
[8]
The Peterson Trust therefore
challenges its knowledge of the sale and its consent thereto in the
main application.
The
Rule 6(5)(g) application
[9]
In the Rule 6(5)(g) application, the
Peterson Trust alleges that the dispute over its consent to the sale
and the authenticity of
the purported resolution is incapable of
being decided on affidavit, therefore the need for the Rule 6(5)(g)
application.
[10]
In the Rule 6(5)(g) application, the
Peterson Trust is seeking that certain defined disputes of fact an
application under case number
2896/2021 (the main application) be
referred for the hearing oral evidence, alternatively, that the main
application be referred
to trial. In the notice of motion in
the Rule 6(5)(e) application, the Peterson Trust pleads that the main
application ‘…
.be referred
to a hearing of oral evidence:
…
.in
connection with the dispute relating to annexure “M9” to
the respondents’ answering affidavit, in particular
but not
limited to the question whether the Billingham Trust; -
1.1
Was aware of the sale of the shares
of the Wilson Family Trust to the Billingham Family Trust as
reflected in annexure “M9”
to the answering afdaivt;
and/or
1.2
Consented to such sale of shares.’
[11]
The Billingham Trust opposes the
Rule 6(5)(e) application. The Billingham Trust alleges: that the
Peterson Trust’s cause of
action has prescribed; material
disputes of facts exist of which the Billingham Trust was aware, yet
it proceeded with motion proceedings;
no dispute exists which cannot
be resolved on paper; and, that there is no person to give
viva
voce
evidence that is not already
before the court on affidavit.
[12]
In addition, on the morning of the
hearing of this application, the Billingham Trust raised a point
in
limine,
not previously raised, that the
application is not properly authorised by the Billingham Trust
because the supporting affidavit
of the third applicant was signed in
Melbourne, Australia. The Billingham Trust argued that the affidavit
does not comply with
the provisions of Justices of the Peace and
Commissioners of Oaths Act 16 of 1963 and the regulations promulgated
thereunder. In
my view, this objection should have come much earlier
and properly pleaded in the answering affidavit.
[13]
Despite the third applicant’s
affidavit being commissioned in Australia, the second applicant’s
affidavit was properly
commissioned and no evidence exists over the
number of trustees of the Peterson Trust that must act in terms of
the trust’s
deed of trust which would off course determine
whether the trust acted or not.
In any event, the second
applicant deposed to a supporting affidavit in the main application
that was commissioned in Fairland,
South Africa. The Rule 6(5)(g)
application is incidental to the main application which was duly
authorised by the third applicant.
[14]
This
in limine
defence is dismissed.
ISSUE
TO BE DETERMINED IN THE RULE 6(5)(e) APPLICATION
[15]
Rule 6(5)(g) of the Uniform Rules
provides:
‘
Where
an application cannot properly be decided on affidavit the court may
dismiss the application or make such order as to it seems
meet with a
view to ensuring a just and expeditious decision. In
particular, but without affecting the generality of the
aforegoing,
it may direct that oral evidence be heard on specified issues with a
view to resolving any dispute of fact and to that
end may order any
deponent to appear personally or grant leave for him or any other
person to be subpoenaed to appear and be examined
and cross-examined
as a witness or it may refer the matter to trial with appropriate
directions as to pleadings or definition of
issues, or otherwise.’
[16]
I
must therefore decide, having regard to the relief that is sought by
the Peterson Trust and the evidence before me, whether the
dispute
over the sale is capable of being properly decided on the affidavits
that were filed. I am not called upon to decide the
main application
– that is for another court to be decided on another day. If I
decide that the dispute over the sale is
incapable of being decided
on affidavit, I must proceed to decide what order to give that would
lead to a just and expeditious
decision of the main application. I
have a wide discretion in this regard.
[4]
[17]
The
Peterson Trust is seeking final relief in motion proceedings. It is
trite that ‘…
..if
in proceedings on notice of motion disputes of fact have arisen on
the affidavits, a final order, whether it be an interdict
or some
other form of relief, may be granted if those facts averred in the
applicant's affidavits which have been admitted by the
respondent,
together with the facts alleged by the respondent, justify such an
order.
[5]
[18]
In
the main application, it is common cause that: the Wilson Family
Trust held 9% of the shares in the company; the Wilson Family
Trust’s
shares were sold to the Billingham Trust; clause 14.2 of the Articles
of Association granted a right of pre-emption
to the shareholders;
Mr. Peterson was aware of the sale more than 3 years ago
[6]
,
i.e after period prescribed for extinctive prescription in terms of
Section 11(d)
of the
Prescription Act 68 of 1969
.
[19]
In the main application the
following is in dispute: prescription of the cause of action; the
resolution, Mr. Peterson alleging
that he never signed the
resolution; the authenticity of the resolution; Mr. Peterson’s
knowledge of the sale at the time
the sale was effected; knowledge of
the provisions of the Articles by the company’s directors; and
whether a shareholders’
agreement was entered into.
[20]
Whether
the Peterson Trust’s cause of action has prescribed will be
determinative of the main application. If the cause of
action has
indeed prescribed, the main application must be dismissed. The
respondents allege that the Peterson Trust’s claim
has
prescribed and therefore no oral evidence can alter the outcome of
the main application. The Peterson Trust denies that its
cause of
action has prescribed. It relies on the authority of
Van
Deventer v Ivory Sun Trading 77 (Pty) Ltd
[7]
where the Supreme Court of Appeal held that prescription in
respect of a claim for specific performance of a right of pre-emption
of immovable property commences when an offer to purchase, which
complies with the requisite formalities, is made in terms of the
right of pre-emption.
[21]
The
facts in the in this matter differ from the facts in
Van
Deventer
.
In this matter: shares were the
merx
and not fixed property as in
Van
Deventer
;
the right of pre-emption is contractual whereas in
Van
Deventer
the right of pre-emption was bequeathed and also registered against
the title deed; in
Van
Deventer
,
the offer was made in terms of the right of pre-emption but not
exercised while in this matter, there is a dispute whether an
offer
was made in terms of clause 14.2 of the Articles of Association; and,
Mr. Peterson was made to believe by Mr. Billingham
that the issue
over the sale of the shares would be resolved. Perhaps (although not
deciding), sub-sections 12(2)
[8]
and 12(3)
[9]
of the
Prescription
Act may
be relevant or become relevant when the main application is
ultimately heard and decided.
[22]
All of these issues in dispute stand
to be determined in the main application. In my view, the issues in
dispute are central to
the determination of the main application.
[23]
The
facts presented in the main application by both trusts creates,
prima
facie
,
a balance of probability
[10]
in the Billingham Trust’s favour and therefore leaves doubt as
to whether the Peterson Trust is entitled to the final relief
its
seeks although, in my view (without finally deciding or binding),
prima
facie
established.
[24]
Motion proceedings are not suitable
to determine probabilities because evidence presented on affidavit is
considered and issues
are determined without the benefit of testing
such evidence. All the court has is at its disposal is the evidential
material before
it in order to determine whether the facts support
the relief that is sought. This the court does by evaluating facts
that are
admitted and those that are denied. The court is called upon
to take a robust approach and not merely refer a matter to oral
evidence
only because the issues are difficult to decide. Off course,
some denials do not assist in the determination of the true state of
affairs or do not upset the facts that are averred. In those
instances, the court is indeed well able to properly decide a case
on
affidavit.
[25]
In
Metallurgical
and Commercial Consultants (Pty) Ltd
[11]
,
what I have said above is expressed somewhat differently:
‘
It
is my view, on a consideration of the papers before me, that the
probabilities are against the respondent on the issue which
I am now
considering. I think it undesirable that I should mention the reasons
for my view in that regard because, despite the
urgings of senior
counsel for the applicant, and the admonition of PRICE, J.P. which I
have quoted, I do not think that it would
be safe or just to deny the
respondent the benefit of the oral hearing for which it has asked.
I do not think that in
forming that view I have been unduly fastidious or lacking in
robustness: and I can but express the hope
that I have not shown
myself to be deficient in common sense. My conclusion rests upon my
experience, and the experience of others
before me, which shows that
an assertion or a denial which seems very probable or improbable on a
reading of a set of affidavits
often takes on a different colour when
the veracity of the person which has made it is tested by
cross-examination. There is the
rare case, of course, in which a
disputed statement made on affidavit is so manifestly untrue, or so
grossly improbable and unconvincing
that the Court is justified in
disregarding it without recourse to oral evidence.’
[26]
As the papers stand now, real
disputes of fact arise. The main application therefore cannot be
properly decided without a referral
to evidence.
[27]
What remains to be determined is
what order must be given so as to ensure a just and expeditious
decision in the main application.
Mr. Peterson’s oral evidence
and that of Ms. Billingham is still available and may be properly
interrogated in order to make
probability and credibility findings if
need be. So for instance, Mr. Peterson is either mistaken or correct
or untruthful or truthful
when he avers that the shareholders were
aware of the provisions of the Articles of Association and/or that he
was unaware of the
sale at the time it was executed and/or that a
directors’ meeting was not held to authorise the sale and/or
the shareholders
were not given the opportunity to exercise their
right of pre-emption. In my view, the only way in which these issues
may be properly
interrogated is by ordering Mr. Peterson and Ms.
Billingham to testify and be cross-examined.
COSTS
[28]
I am unable to determine now
whether the referral of the issues that are defined in the order
below to oral evidence would ultimately
benefit the determination of
the main application. All will depend on the proceedings that are to
follow. For this reason, I have
resolved reserve the costs in this
application for the court determining the main application to decide
upon.
[29]
In the premises, I made the
following order:
(a)
The application under case number:
2896/2021 is referred to oral evidence on the dispute relating to
annexure “M9” to
the respondents’ answering
affidavit in the main application, to the question whether the
Billingham Trust and the Peterson
Trust; -
(i)
Were aware of the sale of the shares of the
Wilson FamilyTrust to the Billingham Trust as reflected in annexure
“M9”
to the answering affidavit; and/or
(ii)
Consented to such sale of shares;
(iii)
Whether a meeting of the directors of
Rendezvous Estates (Pty) Ltd (the company) was held on 2 April 1997
where the company, through
Mr. I.M Billingham, A.J Wilson and M.H
Peterson, resolved to sell 9% of the shares held by the Wilson Trust
to the Billingham Trust;
(iv)
Whether the shareholders were aware of
clause 14.2 of the of the company’s Articles of Association on
2 April 1997.
(b)
Mr. Mervyn Hilton Peterson and Ms. Margaret
Jessie Billingham is directed to give oral evidence in the main
application.
(c)
The parties are directed to approach the
Registrar of this court with a completed Form B of this Court’s
Practice Directive
for purposes of case managing the main application
within 10 (TEN) days of the date of this order.
(d)
The costs of this application is reserved.
Roelofse
AJ
Acting
Judge of the High Court
DATE
OF HEARING:
4 October 2022
DATE
OF JUDGMENT:
13 October 2022
APPEARANCES
FOR
THE APPLICANTS:
Adv
JW Steyn on instructions of Seymore Du Toit and Basson Attorneys
FOR
THE RESPONDENTS:
Adv
EJ Ferriera SC on instructions of WDT Attorneys Inc.
[1]
The first applicant was never a trustee of the Billingham Trust. The
respondents raise this as a point
in
limine
in their opposing affidavit in the main application (paragraph 11
thereof). The applicants reply that they will join the correct
trustee, Mr Dieter Alios Klasse as party to these proceedings when
the main application is heard (paragraph 34 of the replying
affidavit in the main application).
[2]
Clause 14.2 of the Articles of Association.
[3]
T
he
Notice of Motion in the main application reads:
‘
1.
Directing the fourth respondent through its directors to offer 4.5%
of the
shares previously held by the Wilson Family Trust to the
first to third applicants at a price of R 162 500.00 in accordance
with
clause 14.2 of the Articles of Association of the fourth
respondent within a period of fourteen days from the date of the
Court’s
order.
2.
That the first to third applicants have 30 days to accept the offer
referred
to in prayer 1 above.
3.
…..
4.
…..’
[4]
Lombaard v Droprop CC
2010 (5) SA 1
SCA.
[5]
Plascon-Evans
Paints (TVL) Ltd. v Van Riebeck Paints (Pty) Ltd.
[1984] ZASCA 51
;
[1984] 2 All SA
366
(A) at paragraph 9.
[6]
Mr. Peterson became aware of the sale in 1998.
[7]
[2015]
1 All SA 55 (SCA).
[8]
Sub-s
ection
12(2) provides:
‘
If
the debtor wilfully prevents the creditor from coming to know of the
existence of the debt, prescription shall not commence
to run until
the creditor becomes aware of the existence of the debt.’
[9]
Sub-section 12(3) provides:
‘
A
debt shall not be deemed to be due until the creditor has knowledge
of the identity of the debtor and of the facts from which
the debt
arises: Provided that a creditor shall be deemed to have such
knowledge if he could have acquired it by exercising reasonable
care.’
[10]
Per
Colman J in Metallurgical and Commercial Consultants (Pty) Ltd v
Metal Sales Co (Pty) Ltd
1971 (2) SA 388
(W) at 396 E-G:
‘
It
is the respondent who would fail on the disputed issue if it fell to
be decided on the papers; an oral hearing is being granted
at its
instance, in order to afford it an opportunity of altering, if it
can, the incidence of the probabilities as they emerge
from the
papers, and of displacing the inference which flows from the signed
document. Thus, as matters now stand, the applicant
needs no oral
evidence to strengthen its case; it will need such evidence only if
and when the respondent creates, prima facie,
a balance of
probability in its favour. There is no reason why I should compel
anyone to testify. What I should do is give the
respondent the
opportunity which it has sought, and to give the applicant an
opportunity of answering, if he wishes the case
made out by the
respondent.’
[11]
See
note 10.