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[2018] ZAECMHC 23
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Ntloko v Sigaba and Others (2427/2017) [2018] ZAECMHC 23 (8 May 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION: MTHATHA
CASE NO.
2427/2017
PEACE
NOMPEPHO NTLOKO
Applicant
and
SHAKESPEARE
MBONISI SIGABA &
1
ST
Respondent
MASHACK
MKHULULI MKHUNYANA
2
ND
Respondent
CWAYITA
PROPERTIES
CC
3
RD
Respondent
(Registration
No 1997/062792/23)
FIRST
RAND BANK
LIMITED
4
TH
Respondent
STANDARD
BANK OF SA LIMITED
5
TH
Respondent
JUDGMENT
BROOKS
J
[1]
The applicant, the first respondent and the second respondent are all
members of CWAYITA PROPERTIES CC, a close corporation
registered in
accordance with the laws of this country and cited as the third
respondent in the proceedings.
[2]
When this matter first appeared on the opposed motion court roll it
was apparent from the perusal of the affidavits placed in
the court
file that the matter should be capable of settlement. To this
end the parties were engaged through their legal
representatives and,
to the credit of all concerned, agreement was reached on all aspects
of the matter save that relating to liability
for payment of the
costs of the application. The parties were in agreement that
costs should be reserved and that supplementary
heads of argument
should be filed to assist the court in reaching a decision on this
outstanding issue. This has now occurred.
[3]
A brief summary of facts which constitute the background to this
application is called for. Upon its registration, a bank
account with Standard Bank of South Africa Limited, cited as the
fifth respondent, was opened in the name of the third respondent.
During July 2016 the applicant became aware that this bank account
was being operated by the first respondent without transactions
thereon being authorised by a second signatory nominated on the
account. By then, all three members of the third respondent
had
reached an advanced age and each gave authority to a family member to
represent them on a newly formed management committee.
Some
meetings were then held by the management committee.
[4]
In due course it became apparent that the first respondent had
unilaterally opened a second bank account in the name of the
third
respondent. This account was placed with First National Bank
Limited, cited as the fourth respondent. A number
of other
issues relating to the operation of the business of the third
respondent also emerged. Some of these were addressed
at a
subsequent meeting of the third respondent’s management
committee and further agreements were reached. One of
these was
that a third meeting of the management committee should occur on a
specified date.
[5]
The further meeting of the management committee did not occur.
The applicant alleges that the relationship between the
members of
the third respondent soured. She stated in her founding
affidavit that “the first respondent stopped co-operating”.
Letters written to him, seeking information and supporting
documentation, went unanswered. The applicant resorted to the
issue of this application.
[6]
Active opposition to the application by the first respondent revealed
that little factual dispute existed between the parties.
The
first respondent contended that the application was unnecessary as he
was at all times prepared to agree to the relief being
sought.
It was also contended that it was unnecessary for the applicant to
pursue the application after receiving the first
respondent’s
answering affidavit.
[7]
An analysis of the affidavits exchanged by the parties reveals that
there is merit in the concerns raised by the applicant.
Indeed,
the first respondent did open a new account with the fourth
respondent. He did so unilaterally. As part of
his reason
for doing so he complained that the applicant did not show sufficient
interest in the third respondent’s affairs
for a period of
approximately thirty years. This is disputed by the applicant.
[8]
In my view, the first respondent is to be criticised for his
management style reflected in the facts pertaining to the management
of the third respondent’s affairs. Even if the applicant
showed insufficient interest in the third respondent’s
affairs,
the first respondent should have called a meeting of its members to
discuss a resolution of the problem. This was
not done.
Instead, the first respondent conducted the affairs of the third
respondent unilaterally and in apparent contravention
of earlier
resolutions taken at a time when the third respondent’s members
were communicating more effectively. This
is not the way to
manage lawfully the business affairs of a close corporation.
The first respondent was never authorised
by the third respondent,
acting through its members, to conduct the business of the third
respondent in the manner which is admitted
in the answering
affidavit.
[9]
Moreover, the various offers at co-operation made by the first
respondent in his answering affidavit had dictatorial conditions
attached to them. Given the history between the parties and the
qualified nature of the concessions and co-operation offered
by the
first respondent, it is understandable that the applicant saw no
alternative but to pursue the application.
[10]
The criticism of the applicant for instituting these proceedings in
the first place must also be evaluated in the light of
breakdown in
the relationship between the applicant, the first respondent and the
second respondent. Whilst, technically,
it was open to the
applicant to call for a meeting of members of the third respondent in
an attempt to avoid the need to approach
the court, from a practical
perspective this seems to be a step which would have been unlikely to
produce a positive result which
would have avoided litigation.
In evaluating her position the applicant had the experience of the
failure of the management
committee meetings to guide her. This
failure would have been sufficient reason not to bother to call a
members’ meeting
before approaching the court. In this
the applicant’s circumstances are distinguishable from those in
which the first
respondent found himself some years ago. He
offered no explanation for his failure to call a members’
meeting in order
to resolve a way forward for the business affairs of
the third respondent. No management committee had yet been
formed.
On either version, no adequate explanation is given by
the first respondent for the unlawful manner in which he
single-handedly
elected to proceed.
[11]
It follows that in my view there has been no valid reason identified
or advanced by the first respondent to justify an order
for costs
which does not follow the result of his agreement to the substantive
relief claimed by the applicant. In contrast,
the applicant has
established good reasons for both approaching the court and pursuing
the application to finality.
[12]
The following order will issue:
“
The
first respondent is directed to pay the costs of this application on
an opposed basis and on the scale as between party and
party.
”
RWN
BROOKS
JUDGE
OF THE HIGH COURT
Appearances:
For
the applicant:
Adv LM Mills
Instructed
by:
Gcolotela & Peter Inc
c/o
Jolwana Mgidlana Inc
35 Delville Road
Mthatha
For
the first respondent:
Adv DC Botma
Instructed
by:
Chris Bodlani Attorneys
Clublink Building
28 Madeira Street
MTHATHA
Date
heard:
08 February 2018
Date
delivered:
08 May 2018