About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2016
>>
[2016] ZAGPPHC 1038
|
|
Harri and Others v Silogque Landowners Association and Others (A943/2014) [2016] ZAGPPHC 1038 (15 December 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
15/12/16
CASE
NO: 51393/2010 & 55587/2011
APPEAL
CASE NO: A943/2014
Reportable:
No
Of
interest to other judges: No
Revised.
In
the matter between:
HANS
MICHAEL
HARRI
First
Appellant
SILONQUE
(PTY) LTD
Second
Appellant
DR
HARRI-JOUBERT N.O.
Third
Appellant
C
F ZIMMERMAN
N.O.
Fourth
Appellant
PJ
JOUBER
N.O.
Fifth
Appellant
H
D HARRl-CALACA
N.O.
Sixth
Appellant
V
C CALACA
N.O.
Seventh
Appellant
JWBA
STERK
N.O.
Eighth
Appellant
P
STERK
N.O.
Ninth
Appellant
XIHARI
AFRICAN SAFARIS (PTY)
LTD
Tenth
Appellant
and
SILONGQUE
LANDOWNERS ASSOCIATION
First
Respondent
(Association
Incorporated under Section 21)
(known
as Mahlathini Landowners Association)
STEVEN
NEIL
GRIBBIN
Second
Respondent
THE
COMPANIES AND
INTELLECTUAL
Third
Respondent
PROPERTY
COMMISSION
Corum:
Tolmay J; Mothle and Janse van Nieuwenhuizen JJ
Date
of hearing: 2 November 2016
Date
of judgment: December 2016
JUDGMENT
MOTHLE
J
Introduction
1.
This is an appeal before the Full Court of the Gauteng Division,
Pretoria, against the judgment and order delivered by the Honourable
Mr Justice Fourie on 20 September 2013
(" the Court
a
quo").
The judgment concerns two applications by the
Appellant involving the same Respondents and for a similar course of
action under
cases number 51393/2010 and 55587/2011. These
applications were heard together and the Court a
quo
delivered
one judgment and orders for both applications.
2.
The Appellants were the successful party before the Court a
quo.
However, they contend that the honourable Mr Justice Fourie erred
in fashioning the order in paragraph 1 of the orders and failed
in
his judgment to deal with some of the relief sought in the
applications. They then applied for leave to appeal and the
Respondents
also lodged an application for leave to counter appeal
the Judgment and orders of the Court a
quo.
Both applications
were dismissed and only the Appellants approached the Supreme Court
of Appeal, where they were successful. The
Respondent did not apply
to the Supreme Court of AppHal for leave to appeal or counter appeal.
The Supreme Court of Appeal referred
Appellants' appeal to the Full
Court of the Gauteng Division.
Application
for condonation
3.
At the hearing of the Appeal, the Appellants requested the Court's
ruling on a written application for condonation. The condonation
is
sought for the failure to timeously lodge the Powers of Substitution
of the Appellants in terms of rule 7(2) as well as failure
to furnish
security in terms of rule 49(13)(a). They tendered the costs of this
application, if not opposed by the Respondents,
in which instance,
the Respondents be ordered to pay such costs. The provision of the
rules in contention having being complied
with, and the Respondents
indicating that they are not opposed to the application, the Court
granted the application.
Background
facts
4.
The facts of the appeal appear in the judgment and are largely common
cause. By way of background, they are stated succinctly
as
follows:
4.1.
The First
Respondent is a company limited by guarantee and previously
classified as a non-profit company in terms of the old Companies
Act
[1]
as well
as Section 8(1) of the new
Companies Act,
[2]
read together
with provisions of Schedule 1 of the new Act. It
has as its members, persons
owning
portions of land in a property known as Silonque;
4.2. The Appellants,
together with other persons, including the Second Respondent are
members of the First Respondent;
4.3.
A dispute
arose between the Appellants and the First and Second Respondents,
the latter being the Chairperson of the First Respondent.
The dispute
related to the acceptance by the Second Respondent as well as the
First Respondent of proxy votes in the decision-making
and election
of office bearers of the First Respondent. One of the decisions
resulted in a proposal that the name of the First
Respondent be
changed and the necessary documentation was submitted to the Third
Respondent.
[3]
4.4. The Appellants
objected to the acceptance of proxies in the Annual General Meetings
(AGM) held on 26 September 2009, 26 March
2011 and 15 October 2011.
Two applications were brought by the Appellants namely the first one
in 2010 and the second in 2011 as
referred to in paragraph 1 of this
judgment. At the hearing it was agreed that both applications be
heard together; and
4.5. The Court a
quo
declared invalid all the decisions that were taken at these
Annual General Meetings. In the judgement, the Court a
quo
found that the Articles of Association of the First Respondent
specifically, required the decisions to be taken by show of hands
and
not proxies.
4.6. In granting the
orders, the Court a
quo
stated thus:
1.
All
decisions and resolutions taken
by a show of hands
and
adopted at the Annual General Meetings of the first respondent
(Shilonque Land Owners Association) held on 26 September 2009,
26
March 2011 and 15 October 2011 (also referred to
as
:the
2009, 2010 and 2011 AGM)
be and are hereby declared
invalid and are accordingly set aside;
2.
The
purported special resolution of the first respondent dated 29 June
2010 and registered on 12 July 2010 by the third respondent
(Change
of Name) be and is hereby declared invalid and is accordingly set
aside; and
3.
The
cost of both applications (Case number 5139312010 and 5558712011)
shall be paid by the first respondent (Shilonque Landowners
Association) such costs to include the costs of 2 counsel'').
Appeal
Court's emphasis.
4.7. The Appellants
contends, amongst others, that paragraph 1 of the Court orders is
inconsistent with the prayers sought in the
Notices of Motion, the
reasoning and finding by the Court a
quo
as expressed in the
judgment. It is further contended by the Appellants that the Court a
quo erred in the judgment, in not dealing
with and deciding on the
other prayers in the notices of motion.
4.8. The applications for
leave to appeal ensued as described in paragraph 2 of this judgment.
4.9. The Appellant mainly
contends that the whole of paragraph 1 of the Court a
quo's
Court
order, should be deleted and replaced by the following two
sub-paragraphs in accordance with the relief sought and the findings
by the Court a
quo:
1.1.
Under
case
number 5139312010, all decisions and resolutions adopted
at the purported annual general meetings on 26 September 2009 be and
are
hereby declared invalid and accordingly are set aside;
1.2.
Under
case
number: 55587111, all decisions and resolutions
adopted at the purported annual general meetings on 26 March 2011 and
15 October
2011 be and are hereby declared invalid and accordingly
are set aside;
5.
The Respondents in their heads of argument oppose the appeal on the
basis that:
5.1 They intend to deal
(discuss and canvass)
"the grounds relied upon by
the Appellants in this appeal;"
and
5.2
"to prove
or to demonstrate to this Court that the first respondent was
entitled to conduct its affairs as provided for
in
its
Articles of Association and the provisions of the old and new
Companies Acts."
Grounds
of appeal
6.
There are in essence three grounds stated in the notice of appeal.
The first is that paragraph 1 of the orders fashioned by the
Court a
quo
in the judgment is not correct in that it invalidates the
correct procedure of voting by show of hands, contrary to the
findings
by the Court a
quo.
Further, the judgment does not
deal with the invalidation of all voting pursuant to the invalid
Annual General Meeting of 2009.
7.
The second ground is to the effect that the Court a quo should have,
as a consequence of its findings, held that the exclusion
of certain
landowners or their representatives from voting at the 2011 Annual
General Meeting rendered the meeting invalid and
liable to be set
aside.
8.
The third and last ground is a prayer that was not dealt with by the
Court a
quo
in its judgment concerning the removal at the
general meeting of the applicant's entrenched right of veto created
in the deeds of
sale of land.
9.
I now turn to deal with these grounds.
10.
The first ground is confined to the correction of the order no. 1
granted by the Court a
quo
as sought in the applications
brought to that Court. The Respondents' submissions in their heads of
argument seem to misconstrue
this first ground of appeal. The
adjudication of this ground of appeal does not provide a basis for
re-consideration of the reasoning
and findings by the Court a
quo
on the merits. This ground calls on the court to correct
paragraph 1 of the Court order such that it is consistent with the
reasoning
and findings by the Court a
quo.
11.
The Respondents in their heads of argument still quibble about the
validity or otherwise of the voting by proxy. This issue
has been
considered and dismissed by the Court a
quo.
In the absence of
an appeal lodged by the Respondents, this Full Court cannot entertain
further argument concerning the validity
or otherwise of the proxies,
as there is no basis to suggest that the Court a quo erred in its
finding.
12.
Further,
there is no indication by the Respondents in the papers as to why, if
still aggrieved by the decision of the Court a
quo,
they
did not lodge an application for leave to appeal or a counter appeal
with the Supreme Court of Appeal. In the matter of
Minister
of Safety
&
Security
v Mustafa Mohamed
[4]
the
Supreme Court of Appeal rejected the notion that it is permissible
for a party to seek to extend the grounds of appeal at the
hearing,
when prior leave to do so had not been obtained.
13.
In regard to the second and third rounds, it seems that the Court a
quo
did not specifically ma.ke findings in the judgment.
However these two grounds are clearly implied in the order. By
invalidating
all the decisions and resolutions taken by proxy at
these meetings, all decisions and resolutions emanating from the
meetings are
invalidated. Conversely, in fashioning the orders, the
Court a
quo
did not expressly dismiss the prayers for the two
grounds in both notices of motion in the two applications.
14.
There is nowhere in the judgment where the Court a
quo
specifically dismisses any of these prayers. The only exception
is where the Court a
quo
stated as follows in the penultimate
paragraph on page 11 of the judgment:
''The applicants
implied
also
that the 2009, 2010 and 2011 AGM be declared
invalid. In addition to this it should
also
be directed
that in
future all meetings
of members should be
conducted in accordance with the provisions of the Articles
of
Association and applicable legislation. I have considered this
approach carefully, but I
am
of the view that such an order is
not necessary. One should not lose sight of the fact that this
is
a
private society where the general public is not involved. One
should therefore strive not to extend the issue with regard to voting
to include all procedures at
a
meeting unnecessarily."
15.
This is the only instance where the Court a quo demonstrated that it
is not inclined to grant that particular relief as sought
by the
Appellants. However, it is not the relief against which this appeal
was lodged. If indeed it was the Court's intent to decline
some or
other prayers, it would have expressed that intent in clear terms and
would have given reasons for doing so. Consequently,
if it was the
Respondents' intend to attack the Court a
quo's
reasoning and
findings, particularly as regards the first ground; it should have
sought leave to appeal
alternatively
to counter appeal, from
the Supreme Court of Appeal.
16.
During the
hearing, counsel for the Respondents submitted that amendment of
paragraph 1 of the Court orders would have no practical
effect, more
so that the First Respondent has already moved on with a number of
decisions that have been taken since the matter
was heard. The
Appellants in reply referred the Full Court to the matter of
Lauw
v SA Mohair Brokers Ltd
[5]
where
the court held that to deny shareholder participation in the
decision-making of a company, in particular at an AGM is unlawful.
The Appellants were entitled to be heard at the AGM and it does not
matter whether the relief sought is, as the Respondents contend,
of
no practical effect.
17.
It is clear from a proper reading, that paragraph 1 of the orders of
the Court a
quo
is inconsistent with and contrary to the
findings in the judgment and prayers in the applications. The first
sentence of paragraph
1 of the order of the Court a
quo,
as
quoted in paragraph 7.6 of this judgment, erroneously invalidates the
decisions and resolutions taken
by
a
show of hands,
instead
of
by proxy
as found by the Court a
quo
in its
judgment. The Court a
quo
has clearly erred in this regard.
18.
It also follows, as a consequence to the declaration of invalidity of
the votes by proxy, that the decision to remove the Appellants'
veto
rights as entrenched in the deed is also invalid.
19.
Consequently, the appeal should succeed and paragraph 1 of the order
of the Court a
quo
should be set aside and replaced by the
proposed amendment.
20.
In the premises I make the following order:
1. The appeal succeeds;
2. Paragraph 1 of the
Court order of the Court a
quo
is set aside and it is replaced
by the following:
1.
lt is ordered;
1.1Under case number
51393/2010, that all decisions and resolutions adopted at the
purported annual general meeting on 26 September
2009 be and are
hereby declared invalid and accordingly are set aside;
1.2Under case number:
55587/11, that all decisions and resolutions adopted at the purported
annual general meetings on 26 March
2011 and 15 October 2011 be and
are hereby declared invalid and accordingly are set aside;
3. The removal of the
Appellant's entrenched right to veto is declared invalid.
4. The two remaining
orders granted by the! Court a
quo
are upheld and incorporated
in this order;
5. The Appellants are
ordered to pay the costs of the application for condonation.
6. The First and Second
Respondents are ordered to pay the costs of the applications for
leave to appeal in the Court a
quo
and the Supreme Court of
Appeal; and
7. The Respondents are
further ordered to pay the costs of this appeal, including the costs
of counsel.
___________________
S
P Mothle
Judge
of the High Court
Gauteng
Division, Pretoria.
I
agree:
___________________
R
Tolmay
Judge
of the High Court
Gauteng
Division, Pretoria.
I
agree
___________________
N
Jansen van Nieuwenhuizen
Judge
of the High Court
Gauteng
Division, Pretoria
For
the Appellants:
Adv. I Miltz SC
Instructed
by:
Messrs Rothbart Inc
c/o
Du Randt Du Toit Pelser Inc
Hilda
Law Chambers
Hatfield,
Pretoria.
For
the Respondents:
Adv. F W Botes SC
Instructed
by:
Coetzee van der Merwe Attorneys
clo
Barnard Patel Attorneys
Clydesdale,
Pretoria.
[1]
Section 21 of the Companies Act 61 of 1973.
[2]
The
Companies Act 71 of 2008
.
[3]
The Company and Intellectual Property Commission.
[4]
(598/10)
[2011] ZASCA 134
(21 September 2011).
[5]
[2011] 1 All SA 328
(ECP)