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[2016] ZAGPPHC 339
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'Tlam and Others v Tladi and Another (11384/2015) [2016] ZAGPPHC 339 (1 March 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: 11384/2015
DATE:
1 MARCH 2016
In the matter
between
ANDRE
‘TLAM
...............................................................................................................
First
Applicant
MUNGANLALL
JULARR
.........................................................................................
Second
Applicant
LUCY ANNE
TLAM
......................................................................................................
Third
Applicant
LA CABLES
CC
...........................................................................................................
Fourth
Applicant
And
OUPA LAZARUS
TLADI
............................................................................................
First
Respondent
REGISTRAR OF
CLOSE
CORPORATIONS
......................................................
Second
Respondent
JUDGMENT
[1] This is an
application in terms section 36(1) of the Close Corporations Act, 69
of 1984 (“the Act”) in which the
applicants seek an order
in inter alia the following terms:
1.1 that the first
respondent ceases, with immediate effect, to be a member of the Close
Corporation named LA CABLES CC (Fourth
Applicant);
1.2 that the fourth
applicant acquires, in terms of section 36(2)(a) of the Act, the
membership interest of the first respondent,
with immediate effect,
pending a decision by the remaining members of the disposal of the
first respondent’s membership interest
or the acquisition
thereof by the remaining members;
1.3 that the
Registrar of Close Corporations be ordered to amend its records in
accordance with the order;
1A that the value of
the membership interest of the first respondent in LA CABLES CC be
valued and determined by an independent
valuator to be appointed by
the Chairperson of the South African Institute of Chartered
Accountants (SAICA) and such valuation
to take into account the
unpaid portion of the purchase price of the membership interest
acquired by the first respondent in September
2002, such
determination to be final;
1.5 that following
the valuation of the first respondent’s membership interest the
First Respondent shall be entitled to receive
payment
in respect of his
membership interest from the fourth applicant within a period of 12
months from date of the order;
1.6 that the cost of
the evaluation shall be borne equally between the parties. Should any
of the parties pay the account of the
valuator in full, he/she/it
shall be entitled to recover pro rata contributions owing from the
other parties.
[2] The first
applicant is an adult male residing at No 7 Bantry Street, Kenmare
Extension 4, Mogale City (Krugersdorp), Gauteng.
He is a founding
member of the fourth applicant and currently holds a 39% member’s
interest in the fourth applicant.
[3] The second
applicant is an adult male residing at No 4 Crous Drive Helderkruin,
Roodeport, Gauteng. He is a 26% holder of the
member’s interest
of the fourth respondent and is also employed by the fourth
respondent.
[4] The third
applicant is an adult female residing at No 7 Bantry Street, Kenmare
Extension 4, Mogale City (Krugersdorp), Gauteng.
She is a 10% holder
of the fourth respondent’s members’ interest and is
employed by the fourth respondent.
[5] The fourth
applicant is the close corporation duly registered as such in terms
of the Close Corporations Act, No 69 of 1984
(“the Act”)
with registration number CK/1995/02838/23 and with registered office
at 8 Church Street, Mogale City (
Krugersdorp), Gauteng and with
principal place of business at No 7 Bantry Street, Kenmare Extension
4, Mogale City, Gauteng. The
fourth applicant has been trading for
nineteen (19) years in the installation of telephone cables for
Telkom nationally.
[6] The first
respondent holds a 25% member’s interest in the fourth
applicant and is a former employee of the fourth applicant.
[7] The second
respondent is the Registrar of Companies and Close Corporations with
its principal place of business at DTI Campus,
Sunnyside, Pretoria.
The second respondent is only cited for purposes of giving effect to
any order which may be granted by the
court.
[8] Towards the end
of 2013, a dispute arose between the fourth applicant and the first
respondent The said dispute resulted in
the first respondent's
dismissal by the fourth applicant. The dispute was referred to
arbitration where the termination of the
first respondent’s
employment with the fourth applicant was upheld. The parties reached
a settlement agreement on 8 August
2014. It is common cause between
the parties that a deadlock has arisen, as to the fair compensation
of the first respondent and
the issue of accuracy of the members’
interests.
[9] The relationship
between the first respondent and the other applicants has
irretrievably broken down. All the parties are in
agreement that it
is no longer in the interests of the fourth applicant that the first
respondent remain as a member of the fourth
applicant; hence this
application.
[10] Section 36 of
the Act provides:
“(1) On
application by any member of a corporation a Court may on any of the
foliowing grounds order that any member shall
cease to be a member of
the corporation:
(a) Subject to the
provisions of the association agreement (if any), that the member is
permanently incapable, because of unsound
mind or any other reason,
of performing his or her part in the carrying on of the business of
the corporation;
(b) that the member
has been guilty of such conduct as taking into account the nature of
the corporation’s business, is likely
to have a prejudicial
effect on the carrying on of the business;
(c) that the member
so conducts his or her in matters relating to the corporation’s
business that it is not reasonably practicable
for the other member
or member or members to carry on the business of the corporation with
him or her; or
(d) that
circumstances have arisen which render it just and equitable that
such member should cease to be a member of the coloration:
Provided that such
application to a Court on any ground mentioned in paragraph (a) or
(d) may also be made by a member in respect
of whom the order shall
apply.
(2) A Court granting
an order in terms of subsection (1) may make such further orders as
it deems fit in regard to -
(a) the acquisition
of the member’s interest concerned by the corporation or by
members other than the member concerned; or
(b) the amounts (if
any) to be paid in respect of the member’s interest concerned
or the claims against the
corporation of that
member; the manner and times of such payments and the persons to whom
they shall be made; or
(c) any other matter
regarding the cessation of membership which the Court deems fit.”
[11] The cases
dealing with section 36 of the Act make it clear that an applicant
must, in order to succeed, place acceptable evidence
before the court
as to a fair value for the member’s interest of the member who
will be forced to dispose thereof.
[12] In Geaney v
Portion 117 Kalkheuwel Properties CC & others
1998 (1) SA 622
at
631 G-l the court said that an applicant “must set out the
relevant facts to place the Court in a position, inter alia,
to
decide what financial adjustments should be made”.
[13] in Kanakia v
Ritzshelf 1004 CC t/a Passage to India & another
2003
(2) SA 537
(SCA) at
48 E-F, the court held that it is incumbent on an applicant to place
sufficient evidence before the court to enable it
to decide both legs
of the section 36 enquiry - the entitlement to both an order in terms
of section 36(1) and any further relief
in terms of section 36(2).
[14] In Smyth &
another v Mew
2010 (6) SA 537
(SCA) at 25, it is stated that an
applicant must provide the court with all necessary facts so that it
can properly exercise its
discretion to determine a fair value for
the buy-out of a member’s interest. In the absence of that
evidence, the application
must fail. The judgment of Smyth is
supported by Daniels & another v Stander
2012 (2) SA 586
(WCC) at
paragraph 58.
[15] It is apparent
from the facts that the first respondent does not oppose his removal
as a member of the fourth applicant; however,
he makes pertinent
submissions related to the fair and equitable compensation. The
submissions are clouded by various allegations
and disputes. For
example, it was argued on behalf of the respondent that there is an
interim settlement of R500 000 offered by
the applicants which has
not yet been effected. It was also argued that other applicants have
sought to conceal assets of the fourth
respondent. These submissions
are denied by the applicants.
[16] The applicants’
argument is that solutions to the respondent’s concerns should
be found in prayer 4 of the relief
sought in the Notice of Motion.
The said relief is to the effect that an independent valuator with
sufficient accounting qualifications
be appointed by the chairperson
of SAICA in order to determine the value of the first respondent’s
member’s interest
as from September 2002. I cannot agree with
this contention, in that something more per above quoted case law is
required for the
court to exercise its discretion.
[17] There is no
doubt in my mind that the requirements provided for in law,
particularly the presentation of fair values before
the court, are
intended to protect the member sought to be removed. I do not see how
the former member’s interest will be
safely guarded when he is
no longer a member, no matter how independent the valuator might be.
The determination of equity leading
to fair and equitable
compensation cannot be a post event. The applicants have not
presented the necessary evidence and, therefore,
the application must
fail.
ORDER
[18] In the result
the application is dismissed with costs.
NP MALI
JUDGE OF THE HIGH
COURT APPEARANCES
For the
applicants: Adv AT Lamey
Instructed by:
Hurters & Spies Incorporated
For the
respondents: Adv Ledwaba LP
Instructed by:
Mashazi, Sishi, Mathibela Incorporated
Date of hearing:
10 November 2015
Date of judgment:
01 March 2016