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[2021] ZAGPPHC 24
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Jacaranda Haven (Pty) Ltd and Another v JJP Propco (Pty) Ltd and Others (Leave to Appeal) (37063/2018; 45201/2018) [2021] ZAGPPHC 24 (22 January 2021)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
(1)
REPORTABLE: NO.
(2) OF
INTEREST TO OTHER JUDGES: NO
(3) REVISED.
DATE:
22 JANUARY 2021
CASE
NO: 37063/2018 and 45201/2018
In
the matter between:
JACARANDA
HAVEN (PTY) LTD
First
Applicant
THE
BARBEL FOUNDATION (PTY) LTD
Intervening Party
and
JJP
PROPCO (PTY) LTD
First
Respondent
JJP
PROPCO MEDICAL (PTY) LTD
Second
Respondent
PIETER
HENDRIK STRYDOM N.O.
Third
Respondent
MARTHINUS
JACOBUS BEKKER N.O.
Fourth
Respondent
AMANDA
LINDOKUHLE VILAKAZI N.O.
Fifth
Respondent
JAMES
RICHARD BOTHA
Sixth
Respondent
MARIA
HECK
Seventh
Respondent
JACOB
PHILLIPPUS GROBLER
Eighth
Respondent
and
JJP
PROPCO (PTY)
LTD
First
Applicant
JJP
PROPCO MEDICAL (PTY) LTD
Second
Applicant
and
JACARANDA
HAVEN (PTY) LTD
First
Respondent
PIETER
HENDRIK STRYDOM N.O.
Second
Respondent
MARTHINUS
JACOBUS BEKKER N.O.
Third
Respondent
AMANDA
LINDOKUHLE VILAKAZI N.O.
Fourth
Respondent
THE
BARBEL FOUNDATION (PTY) LTD
Intervening
Party
and
JJP
PROPCO (PTY) LTD
First
Applicant
JJP
PROPCO MEDICAL (PTY) LTD
Second
Applicant
and
JAMES
RICHARD BOTHA
First
Respondent
MARIA
HECK
Second
Respondent
JACOB
PHILIPPUS GROBLER
Third
Respondent
J
U D G M E N T (Leave to appeal)
DAVIS,
J
[1]
Introduction
On 30 October 2020, this court
ordered that Jacaranda Haven (Pty) Ltd (then in provisional
liquidation) (Jacaranda Haven) be finally
liquidated. In a
separate application, heard simultaneously, regarding the
directorship of Jacaranda Haven, it was ordered
that Jacaranda Haven
pay the costs of that application. Jacaranda Haven and its
current principal shareholder, who had intervened
in the liquidation
proceedings, now seek leave to appeal these orders.
[2]
Application for leave to appeal to the Supreme Court of Appeal
2.1
In
the closing paragraph of a lengthy application for leave to appeal,
Jacaranda Haven and its aforementioned shareholder, contend
that
leave to appeal should be granted to the Supreme Court of Appeal, “as
the judgment concerns three matters of public
importance”.
These three matters are alleged to be the following:
2.1.1
The
correct approach to disputed evidence on affidavit;
2.1.2
The
correct test of the just and equitable ground for liquidation of a
company; and
2.1.3
The
making of costs orders against a non-party where the relief had been
abandoned.
2.2
As
to the correct approach to disputed evidence in motion proceedings,
the judgment has not determined anything novel in this regard
which
requires determination by the Supreme Court of Appeal. The
trite principles were referred to in paragraphs 3.4 and
3.5
(erroneously numbered 5.1) of the judgment.
2.3
At
to the test of what constitutes just and equitable grounds for
liquidation this has similarly not been determined in a manner
which
changed the existing scope of our law. Again, a decision by the
Supreme Court of Appeal is not warranted.
2.4
The
issue of a costs order against a “non-party” is also not
at play. Costs were awarded against Jacaranda Haven
in case no
45201/2018. In that matter, on behalf of the first applicant a
Mr Prinsloo alleged that his erstwhile co-directors
in Jacaranda
Haven, had unprocedurally and unlawfully attempted to remove him as a
director. He was right, they did.
As part of the relief
sought in that application, Jacaranda Haven was cited as a party.
It was therefore not a “non-party”
as simply alleged in
the above closing paragraphs of the application for leave to appeal.
Mr Louw SC, who argued this point,
referred to a Rule 7 Notice
whereby Mr Prinsloo’s attorney’s authority to act on
behalf of Jacaranda Haven was challenged.
Based on an absence
of a satisfactory response to this notice, it was argued that
Jacaranda Haven was not a party.
Mr Wagener SC, who
appeared for the respondents in the application for leave to appeal,
pointed out that, in terms of the still
applicable provisions of
section 163 (2) of the “old” Companies Act, an
application such as the one launched in case
no 45201/2018 may be
brought by a director, shareholder or the company itself. In
terms of section 157 of the same act, any
of these persons may bring
an application in the name (or on behalf) of the company if the
company cannot itself do so. The
then existing dispute and
deadlock between the directors of the company and the conduct of Mr
Prinsloo’s co-directors, which
conduct he considered to be
unlawful and clandestine, entitled him to instruct his attorneys to
also act on behalf of the company,
resulting in Jacaranda Haven being
cited as a party. At the time of the granting of the costs
argument, subsequent events,
particularly the liquidation of
Jacaranda Haven, have already overtaken the events. It was as a
result thereof and, in the
circumstances of this particular matter,
that I exercised this court’s discretion regarding the
incidence of costs.
The decision was exercised judicially and
was case-specific and no general principle of awarding costs against
a “non-party”
was involved, let alone one which, “in
the public interest” need be resolved by the Supreme Court of
Appeal.
2.5
So
far the bases upon which leave is sought to the Supreme Court of
Appeal.
[3]
The grounds of appeal
3.1
The
remainder of the grounds set out in the application for leave to
appeal on which Jacaranda Haven and the intervening shareholder
argue
that there is a reasonable prospect that another court would come to
a different conclusion on appeal, centres around the
following
issues: was the agreement in respect of which the initial applicants
had, on their version, invested some R 9, 8 million
into the
development and upgrade of the Jacaranda Haven old-age home and the
acquisition of the property on which it is situated
by Jacaranda
Haven itself, a “horizontal” (in the words of Adv Louw
SC) agreement between JJP Propco Medical (Pty)
Ltd and Via Viva
Properties (Pty) Ltd (who then owned shares in Jacaranda Haven) or a
“vertical” agreement whereby
shares would be issued in
Jacaranda Haven to JJP Propco Medical (Pty) Ltd. Ancillary to
this is the dispute regarding the
locus
standi
of the initial applicants.
3.2
Much
was also said about the methodology employed in the judgment to reach
a conclusion and the application of the so-called “robust
approach” to the factual disputes and the affidavits deployed
to address them.
3.3
What
cannot be ignored, are the undisputed payments made to the
conveyancers to enable Jacaranda Haven to acquire transfer of the
property. These were, on any construction, payments made in discharge
of Jacaranda Haven’s debts or obligations. What
also
cannot be ignored is the fact that the initial applicants have spent
hundreds of thousands of rands to enable the running
of and
continuation in existence of the old age home situated on the
property which Jacaranda Haven was going to acquire.
While
there may be some disputes of the full extent (or usefulness) of the
funds expended in construction, maintenance and alteration
of the old
age home by the initial applicants, it cannot be ignored that the
sole reason for such expenditure and investment, was
the common
intention of all parties to improve and develop the property as an
upgraded old age home with a sub-acute facility.
3.4
In
support of the argument in favour of a “horizontal”
agreement as basis for the above, Adv Louw SC has described an
affidavit by attorney Van Staden as the “backbone” of
Jacaranda Haven’s case (clearly because Jacaranda Haven
could
not rely on the contradictory and patently unsatisfactory version of
Dr Botha or Mr Erasmus). Adv Louw SC relied heavily
on the fact
that Mr Van Staden had said that he had been instructed to draft a
set of very complex contracts, one of which was
a sale of shares
agreement, in accordance with the abovementioned “horizontal”
concept. But what Adv Louw SC
also conceded, was that, in the
period subsequent to those instructions to Mr Van Staden, the parties
were (in his words) in a
“dynamic situation”.
Although Jacaranda Haven sought to argue that Mr Van Staden’s
drafts suggest that
the content thereof were the terms of the
subsequent agreement, the evidence does not support this contention.
The proposition
was advanced by the intervening shareholder, who was
a latecomer on the scene and who had no direct knowledge of the
agreement,
and could not contribute any evidence. It relied on
Mr Erasmus, but he gave directly conflicting versions in consecutive
affidavits and cannot be relied on. Mr Van Staden himself took
no part in the subsequent discussions and could therefore also
not
assist and Dr Botha was a conflicted and contradicting witness.
Adv Louw SC conceded as much about Dr Botha but argues
that these
contradictions must be understood and viewed against the background
of the said “dynamic situation”.
What the court was
left with, was Mr Prinsloo’s emphatic reason for not signing
Van Staden’s draft “because that
was not what was agreed
upon” and Dr Botha’s missives at the time (i.e not his
subsequent version once litigation ensued)
where he in writing per
email confirmed the registration of shares in July 2017. These
writings refute the conditional “horizontal”
agreement
version.
3.5
Applying
the test applicable at the time when a final liquidation (winding-up)
order is sought, namely satisfaction of the overall
onus on a balance
of probabilities, then Jacaranda Haven and its shareholder had not
crossed the jurisdictional hurdle of Section
17(1)(a) of the Superior
Courts act, requiring a reasonable prospect of success on appeal in
favour of its version of a “horizontal”
agreement.
3.6
Another
line of attack argued on behalf of Jacaranda Haven was that, even if
the affidavits put up by it do not pass muster and
could rightly be
rejected in terms of the
Plascon-Evens
-rule,
then the initial applicants have not made out a case. This was
more of an alternative argument, should the finding
on the nature of
the acquisition of the shares go against Jacaranda Haven. The
argument was that no claim on enrichment had
been made out. Adv
Louw SC argued that to find that once the causa for investment fell
away, it was “too glib”
a finding to hold Jacaranda Haven
liable for repayment.
3.7
Adv
Wagener SC’s response, if I understood him correctly, on this
point was as follows: it is common cause that the monies
invested
were paid in terms of a contract, either an issue of shares contract
or a sale of shares contract. It is common
cause that whatever
the contract was, it has been terminated, either through repudiation,
cancellation or non-fulfillment of suspensive
conditions. It
must follow that restitution must take place and, even if the sale of
shares argument is followed, the investor
is entitled to claim money
back from Jacaranda Haven if the latter had been enriched thereby.
Apart from all the other monies
spent, this brings one back to the
issue referred to in paragraph 3.3 above when the minimum enrichment
experienced by Jacaranda
Haven occurred when conveyancing fees for
which it was liable pertaining to the acquisition of the immovable
property, was paid
by the initial applicants. One need not do
the customary valuations regarding enrichment and value added to the
property
itself in respect of all the other ancillary expenses which
one customarily finds in enrichment cases: prior to payment of the
fees Jacaranda Haven had a liability in respect thereof for a fixed
amount. After the conveyancers had been paid, Jacaranda
Haven
will be enriched by the amount of the fees if not repaid to the
investor, once whatever the agreement may have been, fell
away.
Whether the actual nature of the cause may be a
condictio
indebiti
or
a
condictio sine causa
or
a
condition ob causam (rem) datia
makes little difference in this construction. The claim for
repayment will still be for the “
recovery
of property in which ownership has been transferred pursuant to a
juristic act which was ab initio unenforceable or has
subsequent
become inoperative
”
(See: LAWSA, vol 9 Para 77 (a work to which Adv Louw SC has also
referred me to) with reference to
Pucjlowski
v Johnston’s Trustees
1946 WW 16). Despite extensive and lengthy argument, I have not
been satisfied that there is a reasonable prospect of success
that on
appeal, based on this point, the liquidation order would be
overturned.
3.8
The
last attack, argued almost as extensively as all the others, was
against the alternative finding that it was just and equitable
in the
circumstances, that Jacaranda Haven be liquidated. With
reference to
Thunder
Cats Investments 92 (Pty) Ltd and Another v Nkonjane Economic
Prospecting & Investment (Pty) Ltd and Others
2014 (5) SA 1
(SCA), Adv Louw SC argued that, in considering this
ground, a court should “look forward” and not impose the
consequences
of a previous deadlock between directors or shareholders
on his client, the intervening party as a newcomer shareholder.
In the circumstances of this case, it is clear that there are
multiple “innocent parties”. This not only includes
the newcomer shareholder, but also the erstwhile investors who have
been made to part with millions without anything to show for
it but
leaving Jacaranda Haven with a property which it could never
otherwise have afforded, even with a business thereon to be
operated
by others to the exclusion of the actual investor. It is clear
that, should a liquidation order not be granted,
this manifestly
unjust and inequitable situation would be perpetuated.
Thunder
Cats
made it clear that the “just and equitable” ground
retained its wide scope, even if a company was solvent and to be
liquidated in terms of Section 81(1) of the “new”
Companies Act 71 of 2008
. This include the exercise of a
court’s discretion without a fixed category of circumstances
limiting such a discretion.
I find insufficient prospect of
success on appeal for a finding that the liquidation should have been
uplifted so that one would,
in the words of Adv Louw SC “let
the fight go its course’.
[4]
Conclusion
In the premises I find that,
despite the extensive and vehement re-arguing of the case and the
attendant criticism of this court’s
methodology in reaching its
conclusions, there are insufficient prospects of success on appeal to
merit the granting of the application
for leave to appeal. I
also find no cogent reason why costs should not follow the event.
[5]
Order
The
application for leave to appeal is refused with costs.
N DAVIS
Judge of the High Court
Gauteng Division, Pretoria
Date of
Hearing: 19 January 2021
Judgment
delivered: 22 January 2021
APPEARANCES:
For
the Applicant:
Adv
P
F Louw
SC
Attorney for
Applicant
:
Kokinis
Incorporated c/o Couzyn,
Hertzog
& Horak
,
Pretoria
For
the Respondents:
Adv
S
D Wagener
SC
Attorney
for Respondents:
Coetzer
& Partners
,
Pretoria