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[2016] ZAGPPHC 361
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Q-Hold (Pty) Ltd and Others v Balintulo (A22/2015) [2016] ZAGPPHC 361 (18 May 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
DIVISION, PRETORIA
CASE
NO: A22/2015
DATE:18
MAY 2016
In
the matter between:
Q-HOLD
(PTY)
LTD
....................................................................................................
1
st
APPELLANT
GXOYIYA,
THEMBA
ERROL
.................................................................................
2
nd
APPELLANT
MAKHAFOLA,
RICHARD
........................................................................................
3
rd
APPELLANT
JOUBERT,
STEPHEN PIERRE
N.O
.......................................................................
4™
APPELLANT
JOUBERT,
DIANE
N.O
.............................................................................................
5™
APPELLANT
A
nd
LINDIKHAYA
COLIN
BALINTULO
..........................................................................
RESPONDENT
JUDGMENT
WRIGHT J
1.
The
shares in the appellant company are held by the second to fifth
appellants and the respondent. I shall refer to the second to
fifth
appellants as the second appellant. The second appellant and the
respondent had a falling out. The respondent launched an
application
against the first appellant and the second appellant in which he
sought the winding up of the first appellant or alternative
relief.
After some delay regarding the filing of an answering affidavit and
after some correspondence had passed between the parties’
legal
practitioners the case was settled. By agreement Phatudi J made the
agreement an order of court on 25 May 2012.
2.
The
order reads:
“Having read the documents
filed of record, heard counsel, considered the matter and having been
informed of the agreement
between the parties, the following is made
an order of court: -
The
First to Fifth Respondents, jointly and severally are to purchase, in
terms of section 163(2)(g) of the Companies Act 71 of
2008 (“the
Companies Act&rdquo
;), the Applicant’s shareholding in the
First Respondent at a value to be determined, in accordance with the
provisions of
section 163(2)(i)
of the
Companies Act, by
an
independent auditor appointed by the Public Accountants’ and
Auditors’ Board of the Republic of South Africa which
appointment is to be made within 15 days of the date of this order.
2.
The parties to this application shall
provide their full co-operation to the independent auditor and do all
things necessary in
order for him/her to arrive at a proper and
accurate determination of the value of the Applicant’s
shareholding in the First
Respondent including providing him/her with
such access to financial records of the First Respondent and/or its
subsidiaries as
he/she deems necessary in order to discharge his/her
obligations in terms of this order.
3.
The determination of the independent
auditor shall be final and binding on the parties.
4.
Any party is entitled to approach the
Court for such further directions as may be necessary regarding the
execution and implementation
of the relief sought in paragraph 1
above.
5.
The costs of this application are
reserved for determination at a later stage.
6.
In the event of any of the Respondents
frustrating, in any manner or form whatsoever, the implementation of
paragraph 1 above, the
Applicant is entitled to approach the Court
for an order directing the First Respondent to be wound up and placed
in the hands
of the Master of the Court in terms of
section
8(1)(d)(iii)
of the
Companies Act on
the grounds that it is just an
equitable to do so and shall have the right to supplement the
founding affidavit to the extent necessary.
7.
Should the Applicant decide to approach
this honourable court as contemplated in prayer 6 above, then in such
event:
7.1.The Applicant shall do so on
not less than 5 court days written notice to the Respondents;
7.2.After the Applicant has
supplemented its founding affidavit as contemplated in prayer 6 above
or has informed the Respondents
of his intention not to supplement
his founding affidavit, as the case may be, the Respondents shall
have 15 days to file their
answering affidavit and the Applicant will
have 10 days to file his replying affidavit, if any.’’
3.
Pursuant
to the order the parties agreed that an auditor would value the
shares in the first appellant and accordingly the respondent’
s
16.26%
shareholding in the first appellant would be valued. The
auditor valued the respondent’s shareholding at R3 500 000 on
22
October 2012. The next day the appellants’ attorney wrote to
the respondent’s attorney suggesting that the R3 500 000
be
paid in instalments of R1 100 000 by 31 December 2012 and thereafter
at R200 000 per month for a period of 12 months. It was
suggested
that interest would not accrue. This suggestion was rejected by the
respondent. The respondent took the view that the
purchase price was
payable in full against tender by the respondent to take the steps
necessary in relation to the transfer of
the shares by the respondent
to the appellants. The tender was made. The correspondence shows that
there was an unsuccessful attempt
by the parties to settle the
impasse.
4.
The
respondent launched an application in which he sought an order that
the first and second appellants be ordered to pay the price
of the
shares as determined by the auditor. Interest was sought at the rate
of 15.5% per annum from 24 October 2012 to date of
payment. I point
out that after the auditor had made his award the parties agreed to
split his fee equally. As a result the precise
amount claimed by the
respondent was after deduction of his half share of the auditor’s
fee.
5.
The
application was successful before Kganyago AJ who granted the
appellants leave to appeal to the present court.
6.
The
respondent’s case is that the agreement of settlement which was
made an order of court imports no term allowing the purchase
price to
be paid in instalments. The appellants’ case is that clause 4
includes the right of either party to approach the
court for
directions as to different matters, including the paying of the price
in instalments or otherwise. The appellants say
that they (more
particularly the first appellant) need time to pay in instalments and
that at the date of the order, 25 May 2012,
the respondent was aware
of the cash flow difficulty.
7.
In
my view, the appellants must fail. It is well known, and was known to
the parties as at 25 May 2012 that money depreciates over
time. If
the appellants are correct then the effect of their being allowed to
pay in instalments means that they pay a lower price
than that
determined by the auditor. This was never contemplated or agreed by
the parties. This finding makes it unnecessary for
me to deal with
other arguments raised in the appeal.
8.
The
only remaining consideration is what meaning to put on clause 4 of
the order. In my view, what the parties intended was not
a question
as big as the paying of the price in instalments or otherwise. Clause
4 covers lesser issues, for example a possible
failure by the Public
Accountants and Auditors Board to appoint an auditor, the possible
failure by the auditor to get on with
the job, the possible failure
by one of the parties to co-operate with the auditor, possible bias
on the part of the auditor and
the like.
9.
The
appellants quibble with the order of Kganyago AJ that the appellants
jointly and severally are liable for payment. I fail to
see the
difficulty. In the first line of clause 1 of the order the parties
agreed that the appellants “jointly and severally”
are to
purchase the shares.
10.
Part
of the opposition to the application was a counter-application by the
appellants in which they sought an order that the respondent
be
ordered to pay the purchase price in instalments. Kganyago AJ found
that it was unnecessary to deal with the counter-application
given
the finding on the main application. Assuming in favour of the
appellants that there is before us an appeal against the failure
of
Kganyago AJ to rule on the counter-application, in my view the appeal
as a whole must fail. I propose the following order.
ORDER
1.
The appeal is dismissed with costs.
GC
WRIGHT J
JUDGE OF THE HIGH COURT,
GAUTENG DIVISION,
PRETORIA Mngqibisa-Thusi J
I agree/disagree
De Vos J
I
agree/disagree
On
behalf of the Appellants: Adv B H Swart SC
J
Vorster
Instructed
by: Van Huysteens Commercial Attorneys
012 349 2306 On behalf of the Respondent:
C Bester
Instructed
by: Fluxmans Inc
C/o
Friedland Hart Solomon & Nicolson 012 424 0200
Date
of Hearing: 18 May 2016
Date
of Judgment: 18 May 2016