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[2021] ZAGPPHC 46
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Gamede v Process Design and Automation (Pty) Ltd and Others (59836/2020) [2021] ZAGPPHC 46 (9 January 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
(1)
REPORTABLE:
NO
(2)
OF
INTEREST TO OTHERS JUDGES: NO
(3)
REVISED
Case number: 59836/2020
In the matter
between:
BONGANI
CYPREAN GAMEDE
Applicant
v
PROCESS
DESIGN AND AUTOMATION (PTY) LTD
First Respondent
BESISONKE
NDABA
Second Respondent
DAVE
BULLER
Third Respondent
JACOBUS
SUTHERLAND
Fourth Respondent
PAUL
BARNARD
Fifth Respondent
FRANCOIS
VAN
HUYSSTEEN
Sixth Respondent
REASONS
FOR ORDER DATED 25.11.2020
BASSON
J,
[1] This was an application
brought on severe truncated times. The applicant (Mr Gamede)
sought
the following relief against the respondents.
1.1 That the applicant be
declared as the rightful owner of 25% of shares of the first
respondent.
1.2 That the applicant be
recorded as a 25% shareholder in the first respondent’s share
register.
1.3 That the applicant be
recorded as a 25% shareholder of the first respondent in the records
of the Companies Intellectual Property Commission (CIPC).
1.4 That the shareholding be so
recorded in the first respondent’s Memorandum of Incorporation
(MOI).
1.5 That the applicant be issued
with the share certificate confirming his 25% share ownership
of the
first respondent.
1.6 That all the respondents,
jointly and severally, pay the costs of the application.
[2]
After
having heard the parties, an order was made dismissing the
application with an order that the applicant pays the costs on
a
punitive scale.
[3] Apart from the fact
that the application is not urgent, the application is entirely
without merit and falls to be dismissed,
inter alia
, on the
following basis:
3.1 The applicant is not entitled
to the relief sought: He does not have the requisite
locus standi
to institute the proceedings.
3.2
The matter is not urgent.
3.3 The application is replete with
factual disputes that cannot be resolved in motion proceedings.
3.4 There exists no cause of action for
seeking a declaratory and the relief sought is defective
regarding
the final interdictory relief that is sought.
3.5 The interdictory and/or final relief
sought that the applicant should “
be recorded as a 25%
shareholder of the first respondent in the records of the Companies
Intellectual Property Commission
” is defective in various
respects, such as the fact that the CIPC is not a party to the
proceedings. The applicant has also
not complied with the procedural
requirements set out in the Shareholder’s Agreement and the
MOI.
3.6 The Practice Directives have not
been complied with nor has proper service of the matter been
affected
as required. The matter has also not been enrolled before the closing
of the roll.
URGENCY:
[4]
In
the papers the applicant alleges that he has “
in
consultation with my legal representative…”
and “
having
been advised in this way by my legal representative
”
realised that he “
urgently
need to remedy the situation to have the rightful owner registered as
the shareholder in the Company’s share register”
.
Even if there was a case made out on the papers for this contention
(of which no case has been made out on the papers as will
be pointed
out herein below), this can, on no conceivable basis, be urgent.
[5]
The
facts set out in the applicant’s founding papers do not
constitute sufficient urgency for the application to be brought
as an
urgent application nor has a case been made out justifying the severe
curtailment of the normal time periods referred to
in Rule 6(5) of
the Uniform Rules of Court. The applicant also does not explain to
the court why this dispute cannot be heard in
the normal course and
why it is so urgent that he should become a shareholder on such an
urgent basis. If anything, if regard is
had to what the applicant
states in his papers, he was offered shareholding (on his version) in
the first respondent during January
2018. Why it then took the
applicant more than two years to approach this court is, in any
event, not explained on the papers.
NON-COMPLIANCE WITH PRACTICE DIRECTIVES:
[6]
It
is trite that a Notice of Motion in urgent applications (and in
accordance with the Practice Directives) must stipulate that
all
three sets of papers, being the founding, answering and replying
papers, must be filed of record before the roll closes at
noon 12h00
on a Thursday preceding the hearing date on a Tuesday. This matter
was set down for Tuesday 24 November 2020. That therefore
meant that
all papers (including the founding affidavit, the answering affidavit
and the replying affidavit) must have been filed
and uploaded by
12h00 the previous Thursday (therefore before 12h00 on Thursday, 19
November 2020). Failure to comply herewith,
“
the
application will not be heard”
.
[7]
The
Notice of Motion in the present matter directs the respondents to
file their answering affidavit by the close of business on
Thursday,
19 November 2020 and therefore not before noon. That meant that, in
the present matter, the respondents had to file their
answering
affidavits no later than 16h30. This was obviously after the roll
closed. The Practice Directive has not been complied
with and the
Notice of Motion is therefore defective.
[8]
The
applicant provides no explanation as to why the Urgent Court’s
Practice Directives have not been complied with regarding
the filing
and/or uploading of all the papers after the closing of the roll at
noon (the previous Thursday prior to the hearing
set down for
Tuesday). The applicant has also failed to properly explain why such
severe truncated time periods were imposed on
the respondents.
NO
LOCUS STANDI
:
[9]
Apart
from the fact that the matter is not urgent, the applicant does not
have any
locus
standi
and makes out no cause of action on the papers. The high watermark of
the applicant’s case on the merits is that he is “
the
rightful owner of 25% of shares of the first respondent
”
and also claims he was entitled to purchase shares by “
agreement
between our client (applicant) and Mr Dave Buller”
(Mr Buller is the third respondent).
[10]
The
applicant does not make out a case on the papers that he is indeed a
shareholder as claimed. Only a shareholder of the first
respondent
will have
locus
standi
to apply for the relief sought.
[11]
Not
only is the applicant not a shareholder, he also does not make out a
case on the papers that he is entitled to become a shareholder.
This
is where the facts set out in the founding affidavit become
unravelled: On the one hand the applicant contends that he had
an
agreement with the third respondent (Mr Buller) to the effect that he
had purchased shares equivalent to 25% of the first respondent.
Then
he contends that he had another agreement with the second respondent
(Ms Ndaba) to be his “
representative
”
in respect of the shareholding and directorship to which he is
ostensibly entitled to. This is confusing and it is simply
impossible
to ascertain from the papers exactly what is contended by the
applicant: (i) whether he seeks to enforce the agreement
between
himself and Mr Buller (third respondent) concluded during 2018; or
(ii) whether he seeks to enforce the “
representative
”
agreement concluded with Ms Ndaba (second respondent).
[12]
The
applicant also provides no particularity regarding the conclusion of
the alleged agreement with the third respondent (Mr Buller)
and, in
any event, Mr Buller expressly denies the alleged agreement
ostensibly concluded with him. The applicant also alleges that
he
would make periodic/instalment payments “
over
a period from 2018 to 31 December 2021
”.
Upon this version of the applicant, the applicant will only become
owner subsequent to making payment thereof at “31
December
2021”. On this construction, the applicant has, in any event,
no
locus
standi
to insist on becoming a 25% shareholder before “
31
December 2021
”.
[13]
Similarly,
the applicant provides no particularity of the “
representation
”
agreement allegedly concluded with the second respondent.
FACTUAL DISPUTES:
[14]
The
papers are replete with substantial and real dispute of fact that
cannot be resolved on the papers. The applicant ought to have
foreseen this but nonetheless forged ahead with this application. One
of the central issues in dispute is whether or not a written
Sale of
Shares Agreement had been concluded. This is not an issue that can be
decided on the papers. See in this regard:
National
Director of Public Prosecutions v Zuma
[1]
:
“[26] Motion proceedings,
unless concerned with interim relief, are all about the resolution of
legal issues based on common
cause facts. Unless the circumstances
are special they cannot be used to resolve factual issues because
they are not designed to
determine probabilities. It is well
established under the
Plascon-Evans
rule that where in motion proceedings disputes of fact arise on the
affidavits, a final order can be granted only if the facts
averred in
the applicant's (Mr Zuma's) affidavits, which have been admitted by
the respondent (the NDPP), together with the facts
alleged by the
latter, justify such order. It may be different if the respondent's
version consists of bald or uncreditworthy denials,
raises fictitious
disputes of fact, is palpably implausible, far-fetched or so clearly
untenable that the court is justified in
rejecting them merely on the
papers. The court below did not have regard to these propositions and
instead decided the case on
probabilities without rejecting the
NDPP's version.”
[2]
[15]
I
am in agreement with the respondents that the various factual
disputes are insurmountable and that the application should therefore
be dismissed.
Non-compliance with statutory requirements
[16]
The
applicant faces numerous difficulties with his contention that he is
entitled to become a shareholder. It falls outside of the
scope of
this brief judgment to deal with these difficulties in detail.
Suffice to point out that his insistence to become a shareholder
is
in direct conflict with section 15(7) of the Companies Act.
[3]
Section 15(7) stipulates:
“
The shareholders of a company may enter
into any agreement with one another concerning any matter relating to
the company, that
any such agreement must be consistent with the Act
and the company’s Memorandum of Incorporation, and any
provision of such
an agreement that is inconsistent with this Act or
the company’s Memorandum of Incorporation is void to the extent
of the
inconsistency.”
[17]
The
applicant does not, for example, deal with the first respondent’s
MOI and the requirements set out therein. Similarly,
the applicant
also does not deal with the written Shareholder’s Agreement and
the provisions contained therein. Briefly,
the applicant’s
insistence to become a shareholder is in direct conflict with the
Shareholders’ Agreement. In terms
of the Shareholder’s
Agreement, the second respondent (the deponent to the answering
affidavit), the third and the fifth
respondents are the shareholders
of the first respondent. In terms of the Shareholder’s
Agreement, the purchase of shareholding
must be tabled in an agenda,
agreed to whereafter the purchase transaction will be reduced to a
written resolution. This has not
been done according to the
respondents. There is also nothing in the applicant’s founding
affidavit that confirms this process.
Moreover, in terms of the MOI
and the Shareholder’s Agreement, the remainder of the
shareholders have a right of first refusal
should any existing
shareholder wish to sell or otherwise offer their shareholding to be
sold to another person. In summary, having
regard to the MOI and the
Shareholders’ Agreement, various formalities will have to be
complied with before the transaction
insisted upon by the applicant
may occur. There is nothing in the papers to show that there has been
compliance with the formalities
prescribed in the Shareholders’
Agreement.
[18]
Having
regard to the MOI, read with the Shareholders’ Agreement and
the Act, the applicant has thus failed to allege, prove,
plead and
produce a written instrument which will entitle him to become a
shareholder. As already pointed out, the applicant has
also failed to
allege, prove or plead that the prescribed process to purchase has
been followed or complied with. Failure to do
so, the applicant has
therefore failed to prove that he has
locus
standi
to prosecute this application.
[19]
The
applicant’s contention that he is entitled to transfer of the
second respondent’s 25% shareholder in the first respondent
is
likewise without any foundation.
NON-JOINDER:
[20]
There
are also issues with non-joinder. A certain Mr Venter is also a
director of the first respondent, yet he has not been cited
as a
respondent. As already pointed out, CIPC has likewise not been joined
as an interested party to this application.
REMOVAL FROM
THE ROLL:
[21]
A day before the matter
was enrolled for hearing (23 November 2020), the applicant’s
erstwhile attorneys unilaterally filed
a notice removing the matter
from the roll. On the same day the applicant’s attorneys filed
a Notice of Withdrawal of Attorneys
of Record. By that time the
respondents have already spent considerable time drafting their
papers in this matter. The respondents
have also by that time filed
their Heads of Argument and their Practice Note.
[22]
Counsel on behalf of the
respondents informed the court that the applicant did indicate to
them that he is aware of the fact that
the matter will proceed. The
applicant indicated to them that he is available to argue the matter.
The applicant did in fact appear
and argued the matter.
[23]
The circumstances in which
a matter may be withdrawn are trite: It may only be done either by
consent of the parties or leave of
the court. Rule 41 reads as
follows:
“
41 Withdrawal, settlement,
discontinuance, postponement and abandonment
(1)
(a)
A person instituting any
proceedings may at any time before the matter has been set down and
thereafter by consent of the
parties or leave of the court withdraw
such proceedings, in any of which events he shall deliver a notice of
withdrawal and may
embody in such notice a consent to pay costs; and
the taxing master shall tax such costs on the request of the other
party.
(b)
A
consent
to pay costs referred to in paragraph (a), shall have the effect of
an order of court for such costs.
(c)
If no such
consent
to pay costs is embodied in the notice of withdrawal, the other party
may apply to court on notice for an order for
costs.”
[24]
The respondents objected
to the withdrawal at such a late stage (without a tender for the
wasted costs for such removal and the
fact that it was not done by
agreement between the parties) and argued that the matter should
proceed. I agreed that the withdrawal
was irregular and that the
matter had to proceed.
COSTS:
[25]
Costs
should follow the result. The respondents argued that the
applicant should pay the costs on a punitive scale. I am in
agreement. This application, for the reasons referred to hereinabove,
clearly constitutes an abuse of process. For these reasons
I have
decided to dismiss the matter and to impose a punitive costs order.
[26]
The
following order was made:
1.
The matter is dismissed;
2.
The applicant is ordered to pay the costs on attorney and client
scale.
AC
BASSON
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION OF THE HIGH COURT, PRETORIA
Electronically
submitted therefore unsigned
Delivered:
This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically
by circulation to the
Parties/their legal representatives by email and by uploading it to
the electronic file of this matter on
CaseLines. The date for
hand-down is deemed to be 9 January 2021.
Case
number:
59836/2020
Matter
heard on:
25 November
2020
For
the Applicant:
In Person
For
the Respondent:
Adv J De Beer
Instructed by:
GP Van der Merwe Attorneys
[1]
2009 (2) SA 277 (SCA).
[2]
See also
National
Scrap Metal (Cape Town) (Pty) Ltd and Another v Murray & Roberts
Ltd and Others
2012
(5) SA 300
(SCA) at paras [21] – [23].
[3]
Act 71 of 2008.