Knipe and Others v Lotz and Others (5081/2014) [2015] ZAFSHC 125 (25 June 2015)

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[2015] ZAFSHC 125
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Knipe and Others v Lotz and Others (5081/2014) [2015] ZAFSHC 125 (25 June 2015)

IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION BLOEMFONTEIN
Case
no: 5081/2014
In the matter between:
JDJ
KNIPE
First
Applicant
ABJ
KNIPE
Second
Applicant
JMD
VIGNE
Third
Applicant
and
CAROL
JESSIE KATHLEEN
LOTZ
First
Respondent
ROBERT
PETRUS JANSEN KNIPE
Second
Respondent
THE
COMPANIES AND INTELLECTUAL
PROPERTY
COMMISSION
Third
Respondent
OA
NOORDMAN NO
Fourth
Respondent
CB
ST CLAIR COOPER NO
Fifth
Respondent
SM
RAMPORORO NO
Sixth
Respondent
(in
their capacity as provisional liquidators
of
Kameelhoek (Pty) Ltd)
OA
NOORDMAN NO
Seventh
Respondent
CB
ST CLAIR COOPER NO
Eighth
Respondent
SM
RAMPORORO
NO
Ninth
Respondent
(in
their capacity as provisional liquidators
of
Schaapplaatz 978 (Pty) Ltd)
JUDGMENT
BY
:
G.
J. M. WRIGHT, AJ
HEARD
ON:
19
MARCH 2015
DELIVERED
ON:
25
JUNE 2015
INTRODUCTION
[1] These proceedings focus on two
questions, namely (i) the identities of the shareholders of two
companies, Kameelhoek (Pty) Ltd
and Schaapplaatz 978 (Pty) Ltd (“the
companies”) and (ii) in what ratio the shareholders are holding
their shares.
Both companies are in liquidation. The alleged
shareholders are siblings, the children of the late Mr Henry Bazzett
Louis John
Knipe (“the deceased”) and Mrs Moira Elizabeth
Knipe (“Mrs Knipe”). For the sake of convenience I will
refer to the siblings by the names Johnny, Andre, Jackie, Carol and
Pieter (these are the names that have been used throughout earlier

litigation as well).
[2] During 1979 ten separate trusts
were created in terms of two master trust deeds. Each separate trust
had one of the siblings
as its beneficiary. It is common cause that
the ten trusts were separate and distinct, each with its own
beneficiary and its own
assets. The shares in the companies were
initially held equally by the ten trusts. The deceased was for all
intents and purposes
the sole director of the companies. He and Mrs
Knipe were the trustees of all the trusts. The deceased passed away
in 2007 where
after Mrs Knipe remained as the sole director of both
companies, the executrix of the deceased estate and the sole
remaining trustee
of all the trusts.
[3] During 2009 Mrs Knipe terminated
the trusts and allocated the shares in the two companies to all five
siblings in equal proportions.
At that time the relevant share
certificates as well as the Registers of Members could not be found.
Mrs Knipe instructed an attorney,
Loftus Viljoen, to issue share
certificates on the basis of her allocation. He did so and these are
the certificates attached to
the First Respondent’s Opposing
Affidavit.
[4] On 25 August 2010 a general
meeting of the two companies was held, organized by Andre, Johnny and
Jackie. Mrs Knipe’s
position as director of the companies was
terminated and these three siblings were appointed as the new
directors. Following the
meeting the new directors instructed an
auditor to reconstitute the Registers of Members and share
certificates of the two companies.
These are the registers attached
to the founding papers. The registers and certificates indicated an
unequal shareholding ratio,
with Pieter holding no shares in either
company.
[5] The siblings Andre, Johnny and
Jackie now want a declaratory order as to the shareholding ratio, and
specifically that Andre
and Johnny each hold 42% of the shares in
each company, Jackie and Carol 8% each and Pieter 0%. These are the
percentages used
in the reconstituted Registers of Members. Pieter
and Carol (First and Second Respondents) are opposing the application
and contend
that the siblings all hold equal shares (as allocated by
Mrs Knipe). Pieter merely claims that the application should be
dismissed
with costs. Carol went further and issued a
counter-application for an order that the equal allocation of the
shares by Mrs Knipe
be declared lawful, valid and binding. The other
Respondents have been cited only as interested parties. The Third
Respondent is
the Companies and Intellectual Property Commission
(“CIPRO”). Fourth to Ninth Respondents are the
provisional liquidators
of the two companies, cited in their official
capacities as such.
[6] The original Registers of Members
and the share certificates of the two companies have seemingly
“disappeared”.
It has not been explained how this
happened. No clear and unequivocal evidence exists of the actual
holding ratio of the shares
prior to the deceased’s death. The
siblings themselves appear not to know the exact ratio. At least no
one made a specific
allegation as to their own personal knowledge.
For quite some time however all the siblings (including the
Applicants) acted on
the belief that their respective trusts, and
later themselves, held the shares in equal proportions, similar to
the factual situation
at the inception of the trusts.
[7] Prior to issuing this application, the Applicants
launched a business rescue application based on the contention that
the shareholding
in the two companies is as now contended for by the
Applicants. In that application they further contend that such a
shareholding
ratio will negate the need for liquidation as it will be
possible to rescue the companies and continue with the business of
the
companies. That application is opposed by Pieter and Carol, as
well as the provisional liquidators of the two companies.
APPLICANTS’ REPLYING
AFFIDAVIT
[8] Before the merits of the present
application and counter-application are dealt with, it is
unfortunately necessary to deal with
the Applicants’ various
replying affidavits (each replying affidavit responds to an opposing
affidavit of a different Respondent).
The first issue to be addressed
is the late filing of the affidavits. The second issue relates to the
contents of one of the replying
affidavits against which the First
Respondent had launched an application to strike out.
[9] Following the applicable time
periods provided for by the rules of court, the Applicants should
have filed their replying affidavits
on or before 9 January 2015.
Instead the affidavits were only filed on 23 February 2015, several
weeks out of time. It was not
accompanied by a condonation
application. In fact, no reference was made to the late filing at
all, neither in the affidavits themselves
nor in the Heads of
Argument filed on behalf of the Applicants. The First Respondent
objected to the late filing of the replying
affidavits.
[10] I raised the issue with Mr Newton, who represented
the Applicants in this application, at the start of the hearing of
this
matter. He submitted that he was under the impression that his
instructing attorney had addressed the issue with the attorney for

the Respondents and that they had come to an arrangement regarding
the late filing of the replying affidavits. This explanation
is of
course not under oath and does not fit in with the objections of the
First Respondent.
[11] The legal representatives for
the First Respondent strenuously denied any suggestion that they
consented to the late filing
of the replying affidavits. This is
evidenced through the contentions in the replying affidavit of Carol
in the counter-application
as well as correspondence annexed to her
Heads of Argument. The same was repeated at the hearing of the
application.
[12] Mr Newton also contended that,
because of the sheer volume of the court papers in this application
and the related business
rescue application, the legal
representatives for the Applicants were unable to prepare the
replying affidavits within the prescribed
time. It was accordingly
submitted that the late filing is understandable and should for that
reason be excused. Mr Newton is quite
correct in as far as the volume
of the papers in this application goes. The numbers are indeed
staggering. The indexed and paginated
papers in the current
application run to more than 1000 pages. The same holds true for the
business rescue application.
[13] The amount of work involved in
preparing the Applicants’ reply in itself does not however
justify the late filing of
the affidavits. This was foreseeable and
should have been anticipated by the legal representatives. Legal
representatives are accustomed
to dealing with huge amount of paper
and the pressure that goes with the preparation of court papers. When
confronted with an application
of this magnitude, the necessary
arrangements are to be made in advance.
[14] It is at this point necessary to
evaluate the attitude of the Applicants and their legal
representatives. Firstly, they did
not grace this Court with a simple
condonation application explaining their difficulties and/or the
reason for the delay in filing.
Secondly, when the Respondents
requested additional time to prepare the answering papers (also
because of the volume of paper and
work involved), no mercy was shown
and the Applicants threatened to set the matter down as an unopposed
motion. Thirdly and most
alarmingly, the matter is not even addressed
in the Applicants’ heads of argument, even if it was only by
means of a reference
to the alleged agreement between the two sets of
attorneys. This despite the fact that it is dealt with in the heads
of argument
prepared on behalf of Carol. The Applicants’
initial heads of argument did not deal with the merits of the matter
in a detailed
manner. During the afternoon preceding the day of
argument, more detailed written arguments were filed. But even this
belated heads
of argument did not deal with the late filing of the
replying affidavits or the Respondents’ objection thereto.
[15] Fortunately for the Applicants, the manner in which
their legal representatives dealt with the issue is such that I
cannot
stretch the blame to also blemish the Applicants themselves. I
further take into account that one of the replying affidavits doubled

as an answer to the counter-application. In responding to the
counter-application, that replying affidavit serves more than one

purpose. And this shareholding application can only be dealt with
properly if all issues have been canvassed fully under oath –

appropriately and within the rules relating to the contents of
affidavits.
[16] I therefore exercise my
discretion to condone the late filing of the replying affidavits.
This does not mean however that the
rules relating to the contents of
a replying affidavit are hereby relaxed. It is necessary to point
this out as, unfortunately
for the Applicants, allowing their
replying affidavits is not where their obstacles end. The actual
contents of the replying affidavit
in response to the opposing
affidavit of the First Respondent are attacked by means of an
application to strike out. This interlocutory
matter was
comprehensively argued by means of written submissions on behalf of
the Applicants and the First Respondent.
[17] The essence of the attacks on
the Replying Affidavit can be more appropriately dealt with after the
merits of the matter itself
have been adjudicated. The manner in
which I intend to deal with the merits of the application itself will
form a proper background
to an adjudication of the application to
strike out and the issues relevant to such interlocutory application.
I now proceed to
deal with the merits of this matter.
CASE FOR THE APPLICANTS
[18] The Applicants do not contest
the validity of Mrs Knipe’s termination of the trusts. They do
however vehemently contest
her allocation of the shares in equal
proportion. In this regard the Applicants contend that:
(i) At the time of the deceased’s death the trusts
did not hold the same assets and especially did not hold equal shares
in
the companies. That would also have been the situation at the time
when Mrs Knipe terminated the trusts.
(ii) The shares that were held by the respective trusts
had already vested in each respective trust.
(iii) The trust deeds did not afford Mrs Knipe a
discretion to reallocate the trust assets amongst the beneficiaries.
(iv) Mrs Knipe should have identified
the actual assets held by each trust and proceeded to transfer such
actual assets to each
respective beneficiary.
[19] The core of the Applicants’
case and representation thereof is then summarized in the Founding
Affidavit, deposed to
by the First Respondent, Johnny, as follows:
“
The original Registers of
Members for both companies unfortunately disappeared shortly after my
late father (Mr HBLJ Knipe) passed
on 28 June 2007 and the applicants
were accordingly left with no alternative other than to instruct
Messrs Willem Lodewyk Pretorius
(the auditor for both companies
during or about the early 1990’s) and Mr Andre De Jager (the
auditor for both companies at
the date of the liquidation) to
reconstitute the Registers of Members for both companies and to
re-issue the share certificates
in both Companies using the best
available evidence
.”
[20] The quoted passage creates the
impression that the Applicants were unaware of the shareholding ratio
that they are now contending
for and that they only found out what
the ratio was after the so-called “best available evidence”
was produced.
[21] I find it strange that the Applicants are able to
specifically aver that the registers disappeared shortly after the
deceased’s
death. This invites the inference that the
whereabouts of the registers were known to them earlier and that,
only when they wanted
to retrieve it after the deceased’s
death, they discovered its disappearance. This would then lead to the
further inference
that the Applicants would have known what the
contents of the registers were. But none of the Applicants are
alleging that they
have any knowledge of the actual contents of the
registers. It begs the question whether the deceased and Mrs Knipe as
trustees
ever discussed the workings of the companies, such as the
shareholding, with their children, especially after the children
reached
the age of majority. They surely must have done, even if it
was only to comment on the payment of dividends to the trusts (the
then shareholders of the two companies). The Applicants are however
not relying on personal knowledge and no cogent reason is advanced

for this state of affairs.
[22] The so-called best available
evidence referred to by the Applicants is dealt with in the reports
of two auditors (with annexures
thereto). The auditors, Andre De
Jager and Willem Lodewyk Pretorius, also deposed to affidavits,
confirming the correctness of
their respective reports. Their
affidavits are attached to the founding papers.
PRETORIUS
[23] The “report” of
Pretorius is dated 24 October 2014 and is contained in a letter to
the First Applicant. In this
letter / report Pretorius does more than
merely present documents and conclusions. He gives advice to the
First Applicant and appears
to also present a chronology of the
actions of the Applicants in connection with the companies after the
trusts were terminated
by Mrs Knipe and the shares allocated to the
siblings.
[24] In his affidavit Pretorius
refers to “
the
methodology and reasoning employed
”
in
compiling his report. He does not however explain what methods of
reasoning he actually employed in order to formulate his conclusions

and opinions. The report itself refers to historical documents
(“
argiefrekords
”
;
“
historiese
dokumente
”
).
These documents are then listed as follows:
“
-
‘
n
Inwydingsvergaderingsnotule van Schaapplaatz 978 (Edms) Bpk gedateer
1 Oktober 1979
;
-        ‘n
Skrywe gedateer 15 Augustus 1984 van Arthur Young and Company aan
Landbank;
-        Uplands
Saaiery (Edms) Bpk se maatskappyregister wat die korrektheid van
Arthur Young and
Company se skrywe gedateer 15 Augustus 1984
bevestig;
-        Landbank se
gekanselleerde borgakte gedateer 30 Januarie 1985;
-        Die verklaring
deur my, gedateer 14 Oktober 1994, aan Standard Bank;
-        Standard Bank
se borgskapvorms met aanhangsels gedateer 9 Desember 1994;
-        ‘n
Skrywe van Darryl Preece and Associates gedateer 7 Desember 2004;
-        Finansiële
state van Trusts Knipe Kinders (geskep deur RL Knipe) vir die jaar
geëindig
29 Februarie 1984;
-        Finansiële
state van Jansen Knipe Trusts (geskep deur PG Jansen) vir die jaar
geëindig
29 Februarie 1984; en
-
‘n Skrywe gedateer 14 November 1984 aan Landbank deur jou vader
in sy eie handskrif.”
[25] In the founding papers the
documents listed above are attached to the report of Pretorius. None
of the documents so attached
are original documents. Pretorius states
specifically that he used
all
the historical documents that he could find (“
alle
historiese dokumente waarop ek my hande kon lê
”
).
As will be seen later this bold assertion cannot be correct as there
appear to be more available documents.
[26] Pretorius seems to have done
little more than present certain documents and then relate what is
stated in the documents. He
does not explain where the documents were
found or how he went about in searching for relevant documents. He
mentions that his
own files had already been destroyed previously.
According to Pretorius, after he found the “historical
documents”,
he then remembered that the trusts did not hold
equal shares in the companies. By mentioning that the documents made
him “remember”,
Pretorius presents a picture of a person
who did not have an independent memory of the relevant state of
affairs and need to rely
on documentation. This is in contrast to an
earlier paragraph in his report which reads: “
Weens
my betrokkenheid by u vader, het ek nog presies geweet hoe dat hy die
trusts en maatskappye in sy sakestruktuur gebruik het.
Ek het presies
onthou van die trusts . .
.”
[27] When Pretorius comments on the
shareholding of Pieter’s trusts he does so in the following
manner:
“
Volgens die historiese
inligting kon RPJ Knipe geen aandele ontvang het nie, want sy trusts
se aandele is al in 1983 aan die JDJ
Knipe Trusts en die ABJ Knipe
Trusts verkoop
.”
[28] None of the documents that
Pretorius attached to his report, confirm any sale in the specific
detail that Pretorius alleges
in the quoted passage. The information
presented by Pretorius does not explain the alleged decrease in the
shareholding of Jackie
and Carol. Pretorius clearly appears not to
have an independent memory of the exact ratio in which the shares
were held by the
various trusts, but has to rely on the contents of
documents. This is understandable as Pretorius was the deceased’s
auditor
in the early nineties, almost two decades before he was
requested to comment on the shareholding issue. The request was made
by
the “new” directors of the two companies and was made
to Pretorius as the newly appointed company secretary of the
companies.
[29] In the circumstances I do not
consider the report of Pretorius as an authorative answer to the
vexing question regarding the
correct shareholding ratio at the time
of the termination of the trusts. My view in this regard is bolstered
by the application
of principles regarding opinions expressed in
affidavits. In the case of
Die
Dros (Pty) Ltd and Another v Telfon Beverages CC and Others
2003 (4) SA 207
(CPD) it is stated at 217 B – D that:
“
[I]t is trite law that the
affidavits in motion proceedings serve to define not only the issues
between the parties, but also to
place the essential evidence before
the Court (see
Swissborough
Diamond Mines (Pty) Ltd and Others v Government of the Republic of
South Africa and Others
1999
(2) SA 279
(W) at 323G) . . . . The affidavits in motion proceedings
must contain factual averments that are sufficient to support the
cause
of action on which the relief that is being sought is based.
Facts may be either primary or secondary. Primary facts are those
capable of being used for the drawing of inferences as to the
existence or non-existence of other facts. Such further facts, in

relation to primary facts, are called secondary facts. (See
Wilcox
and Others v Commissioner for Inland Revenue
1960
(4) SA 599
(1) at 602A; R
eynolds
NO v Mecklenberg (Pty) Ltd
1996
(1) SA 75
(W) at 78I.) Secondary facts, in the absence of the primary
facts on which they are based, are nothing more than a deponent’s

own conclusions (see
Radebe
and Others v Eastern Transvaal Development Board
1988
(2) SA 785
(A) at 793C – E) and accordingly do not constitute
evidential material capable of supporting a cause of action
.”
[30] In
Minister
of Land Affairs and Agriculture v D and F Wevell Trust
2008 (2) SA 184
(SCA) at 200 Cloete JA observed:
“
It is not proper for a
party in motion proceedings to base an argument on passages in
documents which have been annexed to the papers
when the conclusions
sought to be drawn from such passages have not been canvassed in the
affidavits. . .
.”
[31] Pretorius does not discuss all
the documents attached to his report. His report does not even
indicate that the documents that
he listed were in fact attached to
the report at the time that it was presented to the Applicants. His
affidavit does not assist
in this regard. Pretorius concludes his
report by merely stating that he agrees with the contents of De
Jager’s report (“
Andre
De Jager se aangehegte verslag
”
).
[32] The manner in which the opinions of Pretorius have
been presented leaves me no choice other than to deal with each of
the documents
forming part of Pretorius’s report separately and
to then use them to come to my own conclusions, if possible.
HISTORICAL DOCUMENTS
[33] Arthur Young & Company are
chartered accountants who appear to have assisted the deceased over a
period of time. In a letter
dated 15 August 1984 someone on behalf of
Arthur Young & Co. purportedly informed the manager of Landbank
of the identities
of the directors and shareholders of three
companies, being Kameelhoek (Edms) Bpk, Schaapplaatz 978 (Edms) Bpk
and Uplands Saaiery
(Edms) Bpk. In this letter the trusts of all the
siblings, except for those of the Second Respondent, Pieter, were
listed as shareholders.
The Applicants did not place the original of
this letter before the court. It has not been authenticated by either
the author thereof
or any person connected to Landbank. The
Applicants attempted to do so belatedly by means of an affidavit by
one Van de Venter
attached to the Replying Affidavit. I will deal
with this affidavit later and at the stage when the application to
strike out is
considered. Suffice to say here that one would have
expected the Applicants to use Van de Venter, and any corroboration
that he
may be able to provide, in the founding papers.
[34] Carol also relies on a letter by
Arthur Young & Co. It presents as a letter written after the one
of 15 August (even though
it is dated 14 August 1984). This letter
lists all ten trusts as being shareholders of Schaapplaatz and
Kameelhoek. This subsequent
letter has of course also not been
authenticated. Unlike the letter that the Applicants rely on, it does
not carry the letter head
of Arthur Young. But it cannot be denied
that such a document exists and no one has argued that this letter is
a forgery.
[35] The two contradictory letters
are a clear manifestation of the difficulty and danger inherent in
having to make conclusive
findings (and come to conclusions) based
purely on unauthenticated copies of historical documents,
unsubstantiated by the evidence
of a person with an independent
memory of the facts canvassed in the documents. The contents of the
two letters are at odds. The
Applicants however carry the onus to
prove their version if they want to succeed with the relief that they
are praying for. Out
of context and without more, the unauthenticated
letter of 15 August 1984 is not enough to discharge that onus;
especially when
considered together with other available
documentation.
[36] The Applicants themselves
annexed a further letter, dated 4 September 1985, to their founding
papers. This letter also appears
to have been written on behalf of
Arthur Young & Company and is addressed to the Receiver of
Revenue. The letter serves to
confirm that the tax returns of
all
ten
trusts were
submitted. This invites the question as to what the contents of the
tax returns (which are not attached) were. Did
it indicate that the
trusts of Pieter indeed held no shares at the time? And what was the
situation with the trusts of Carol and
Jackie? Did they each hold
only 8% of the shares as the Applicants allege? This letter is
consequently also of no assistance in
the present dispute.
[37] The Applicants urged this court
to read documents dealing with the shareholding in another of the
deceased’s companies,
Uplands Saaiery (Edms) Bpk, as indicating
that on 30 March 1983 the shareholding ratio of the various trusts in
this
company was amended. From the documents it appears as if the Uplands
shares of one of Andre’s trusts were increased from
200 to 300,
those of one of Johnny’s trusts were increased from 200 to 300
and that those of one of Pieter’s trusts
were decreased, first
from 200 to 100 and then to zero. On the basis of this information it
was then argued that, in the same way
as the shares held by Pieter’s
trust in Uplands Saaiery were transferred to the trusts of Andre and
Johnny, the shares that
Pieter’s trusts held in Kameelhoek and
Schaapplaatz were also transferred to the trusts of Andre and Johnny.
Without specific
references to the other two companies, this again
seems to be a jump too far. There is nothing to indicate that the
deceased ever
dealt with Kameelhoek and Schaapplaatz in exactly the
same manner as Uplands. The registers of Uplands Saaiery contain no
reference
to either Schaapplaatz or Kameelhoek. No reasons have been
advanced as to why the Uplands share ratio was adjusted or why the
shares
in the other companies would have been treated in a similar
manner.
[38] A Landbank deed of surety dated
30 January 1985 lists only the trusts of Andre, Johnny, Jackie and
Carol as shareholders of
Kameelhoek and Schaapplaatz.  Only
these trusts were then bound as sureties to Landbank for debt of the
two companies. The
trusts of Pieter were not mentioned. The
Applicants argue that this is proof that Pieter’s trusts no
longer held shares in
the two companies. The deed of surety in itself
does not explain that this was indeed the situation. Pieter provides
an explanation
as to why his trusts were not bound as sureties. He
avers that “his” shares were pledged to Landbank for debt
which
he himself had occurred. No documentation was presented to
corroborate this explanation for why Pieter’s trusts are not
referred
to in the deed of surety. The failure to provide
corroboration for this specific allegation does not however assist
the Applicants
in discharging their onus. The mere fact that only
eight trusts were presented to Landbank as sureties does not provide
proof of
the shareholding ratio, especially not the ratio that the
Applicants claim.
[39] A deed of surety dated 9
December 1994 bound the shareholders of Schaapplaatz as sureties to
Standard Bank for a loan of the
company. Only the trusts of the
Applicants and Carol are listed as shareholders of the companies. In
the “
Consent
”
portion of the document the trusts are listed and then referred to as
“
being all the
members of SCHAAPPLAATZ 978 (PROPRIETARY) LIMITED
”
.
Pieter’s trusts are not mentioned. The same facts are
applicable to a suretyship binding the shareholders of Kameelhoek
as
sureties to Standard Bank for debt incurred by the company
Kameelhoek. The clear wording of these two deeds of surety supports

the argument that Pieter’s trusts at that stage were no longer
holding any shares in the two companies. It does however not
indicate
the ratio in which the trusts of the other siblings held their
shares.
[40] A letter prepared by one D. Preece, dated 7
December 2004 and directed to the Standard Bank Business Centre,
lists the shareholders
of Kameelhoek (Pty) Ltd as:
-
“
Knipe
Children’s Trusts – 2 000 shares
”
-
“
Jansen Knipe
Trusts – 2 000 shares
”
The shareholders of Schaapplaatz 978 (Pty) Ltd are
listed in the same letter as:
-
“
Knipe
Children’s Trusts – 50 shares
”
-
“
Jansen Knipe
Trusts – 50 shares
”
This letter in itself does not
exclude the trusts of Pieter as shareholders of the two companies.
Furthermore, it does not identify
the shareholding ratio.
[41] Unsigned financial statements of
the trusts for the financial year ending 29 February 1984 refer to
the “
TRUSTS
KNIPE KINDERS
”
as
“
a joint
venture in equal shares between the five trusts
”
.
In similar fashion the “
JANSEN
KNIPE TRUSTS
”
is
also referred to as “
a
joint venture in equal shares between the five trusts
”
.
The headings for both sets of financial statements is indicative
thereof that the trusts of all five children were treated as
equal
shareholders. These statements were prepared after the alleged change
in shareholding and while the deceased was still the director
of the
companies and trustee of the trusts. It should be remembered that the
deceased himself was a qualified chartered accountant
who is expected
to have been diligent when dealing with business affairs. The
financial statements indicate a difference in the
manner in which the
nett income of each trust is distributed. Pieter’s trusts
received smaller amounts than the others. The
financial statements
provide no reason for this difference. The difference in itself
however does not provide proof that the shares
held by Pieter’s
two trusts were sold in its entirety to the trusts of Johnny and
Andre.
[42] Both sets of financial
statements contain the following note: “
Adjustment
with internal Sale of Shares – 1 MARCH 1983
”
.
The notes however do not explain how the internal sale was concluded
– they do not explain who the buyer(s) and seller(s)
were, and
they do not explain in what manner the seller(s) was compensated (if
at all). More importantly, it is not explained which
company’s
shares were so sold. It is common cause that the trusts held shares
in various companies, amongst others Uplands
Saaiery. And as set out
above, it appears common cause that the shareholding in Uplands
Saaiery was adjusted. The notes in the
financial statements could
therefore just as well refer to the internal sale of Uplands Saaiery
shares. The notes in the unsigned
financial statements do not
substantiate the Applicants’ version,
i.e.
that an internal sale took place which caused the shareholding of
Andre and Johnny to increase to 42% each, that of Carol and Jackie
to
decrease to 8% each and that of Pieter to 0%.
[43] A sale of Robert’s shares
to Johnny and Andre would not explain why the number of shares held
by the trusts of Jackie
and Carol were decreased. The financial
statements do not assist the Applicants in proving their version of
events to be the correct
one. Even of it is accepted that the notes
relate to the internal sale of the shares in Kameelhoek and
Schaapplaatz, it does not
indicate that the shareholding ratio was
amended in the manner that the Applicants contend for.
DE JAGER
[44] Andre De Jager, an auditor,
compiled a report dated 27 October 2010. In his confirmatory
affidavit De Jager confirms the correctness
of his report. As was the
case with Pretorius, De Jager also does not explain what methodology
he used in preparing his report.
De Jager was the person requested by
the new directors of the companies (the Applicants) to provide an
updated register of shares
for each company. He did this by using
certain “
rekords,
boeke en skrywes
”
.
I infer that he used the documents that Pretorius lists. At the time
of this “investigation” into the shareholdingissue,
De
Jager had already been appointed as the auditor of the companies by
the Applicants.
[45] Just like Pretorius, De Jager
does not explain whether the documents that he relied on are the only
relevant and available
documents. Nor does he explain how the
documents came to be in his possession.  De Jager gives a
summary of his findings and
opinions, without explaining how he went
about in coming to these findings or opinions. Some of the documents
referred to in the
report are attached to the report itself, such as
the original Certificate of Incorporation and Memorandum and Articles
of Association
of each of the two companies. Those that are not
attached appear to be the documents already annexed to the report of
Pretorius.
[46] De Jager boldly states that the
shareholding ratio was amended on 30 March 1983. He does not provide
proof for this statement.
He also presents the following so-called
conclusion without providing any proof to substantiate it:
“
Tot op daardie stadium is
daar voldoende bewyse van die oordragte in die onderskeie
verhoudings. RPJ Knipe, CJK Knipe and JMD Knipe
is vergoed vir die
aandele wat hulle verloor het in die finansiële state in die
1984 finansiële jaar. (internal sale
of shares)
”
De Jager provides no explanation as
to how he came to this conclusion. The so-called proof is not
detailed or attached. Without
corroboration this conclusion cannot be
afforded any weight and it does not assist the Applicants in proving
their case.
[47] Just as this court cannot rely
on the conclusions reached by Pretorius, De Jager’s findings
also present problems and
in similar vein leads to a situation where
his views should be disregarded and the sources he used investigated
independently.
It is significant that when the paucity and vagueness
of the reports of De Jager and Pretorius was attacked by the First
and Second
Respondents, the two experts chose not to file further
affidavits in reply. The Applicants attempt to explain the conduct of
De
Jager and Pretorius (see for example paragraph 64.1 of the
Replying Affidavit), but these attempts are not confirmed by either
De Jager or Pretorius themselves. I will later address this when
dealing with the application to strike out.
[48] Both De Jager and Pretorius
appear to have been elective about the documents they used. They make
no reference to the documents
that Carol attaches to her opposing
affidavit, such as the minutes of meetings held at Kimberley by the
sole director of the companies
at the time (the deceased), dated 27
July 1985. There the deceased recorded that all ten sub-trusts held
shares in the two companies.
This is in sharp contrast to the
documentation that the Applicants prefer to rely on.
[49] The Applicants boldly state in
paragraph 54.1 of their Replying Affidavit that
“
.
.. all of the available documentary evidence indicates that the
actual share allocation at the time when the Trusts were determined,

is that contended for by the Applicants. There is not one shred of
objective, documentary evidence to support the equal allocation

contended for by the Respondents . . .
”
This
statement is clearly incorrect as there is indeed documentation that
presents a different picture. Clearly De Jager and Pretorius
did not
use the other available documentation.
DOREEN BARLOW
[50] Separate to the reports of the
auditors, the Applicants also rely on an affidavit by a certain Ms
Doreen Barlow, the deceased’s
former receptionist, head of his
Secretarial Division and tax clerk during the period 1 January 1978
to 28 February 1991. She deposed
to her affidavit on 30 September
2014 (23 years after she last had anything to do with the business
affairs of the companies).
Barlow explains that the inscriptions in
the registers of Uplands Saaiery referred to earlier, were made by
her. She then alleges
that she can “
clearly
remember
”
that
on the same date of these inscriptions, inscriptions were also made
in the registers of Schaapplaatz and Kameelhoek, effecting
changes in
the shareholding. She alleges that she remembers that she provided a
Mr Ian Tucker of Arthur Young & Co. with the
shareholding ratio
during 1984 when he required same for purposes of a Landbank loan.
Barlow does not state what the ratio was
that she so provided.
[51] Barlow concludes her affidavit
with the following significant sentence:
“
Ek sou nie die
aandeelhouding uit my kop kon onthou nie, wat ek wel van seker is, is
die feit dat RPJ Knipe se aandeelhouding destyds
na nul verminder is
en die twee dogters, Carol en Jackie s’n ook verminder het
.”
[52] It is significant that Barlow
cannot remember the specific changes that were made to the
shareholding of the trusts of Jackie
and Carol. She does not remember
that the shareholding of the trusts of Johnny and Andre were
significantly increased. Inexplicably
she only remembers that
Pieter’s shares were reduced to zero. Even if this court should
choose to rely on the sketchy memory
of Barlow, her information does
not present with a clear picture as to the shareholding ratio,
especially not the ratio that the
Applicants promulgate.
[53] The Applicants were unable to present the evidence
of a person who can say with any real (and reliable) conviction if
there
was indeed an internal sale of the shares of Kameelhoek and
Schaapplaatz, and if there was such a sale, what the terms thereof
were. There is always the possibility that the deceased reallocated
shares without an actual sale. Should that have been the case,
he
acted in the exact same manner as Mrs Knipe did (and for which she is
blamed by the Applicants). Later documents also then present
that the
deceased may have re-adjusted the ratio at a later stage.
CASE FOR FIRST AND SECOND
RESPONDENTS
[54] The First and Second Respondents
both oppose the application. They do this based on the argument that
Mrs Knipe was entitled
to allocate the shares as she pleased as she
had an absolute and unfettered discretion in terms of the trust
deeds. The First Respondent
launched a counter-application for an
order declaring that Mrs Knipe acted correctly in the way that she
allocated the shares in
the two companies amongst the siblings. The
Second Respondent appears not to join in that application.
[55] The First Respondent presented
documents in conflict with those relied on by the Applicants. Some of
these documents have already
been referred to earlier in this
judgment. In relying on these documents, the First Respondent
struggles with the same difficulties
that the Applicants have. None
of the documents have been authenticated and no person with an
independent (and more importantly)
reliable memory is available to
present their version of the facts.
[56] The documents relied on by the
various parties are inconsistent and contradictory. Factual disputes
and / or lacunae abound.
I will come back to the issue of factual
disputes after I have dealt with further arguments presented by Carol
and Pieter.
[57] The Respondents’ strongest
argument in opposition to the Applicants’ claims is based on
the judgments of the various
courts that dealt with disputes between
the siblings (and other parties) and the court documents relied on in
such litigation,
the most important of which are the liquidation
proceedings of the companies. Carol and Pieter argue that the court
already made
factual findings regarding the shareholding ratio in the
various judgments delivered during the winding-up proceedings. It is
specifically
contended that the Full Bench of this Division (who
issued the provisional liquidation orders) as well as Daffue J (who
issued
the final orders of liquidation) had found that the
shareholding was equal. This argument brings the principles relevant
to
res iudicata
into play.
RES IUDICATA
[58] I find it convenient to give a
short summary of the general principles traditionally applicable to
res iudicata
.
Firstly, the earlier judgment relied on must be a final or definitive
decision, in other words a decision which put an end to
the dispute
(
lis
)
between the parties. See for example:
S
v Moodie
1962 (1) SA 587
(A)
at 596 E – F;
Custom
Credit Corporation (Pty) Ltd v Shembe
1972 (3) SA 462
(A)
at 472 A – B. In order to qualify as a final or definitive
judgment, the judgment must be on the merits of the cause
of action
which is sought to be litigated afresh (
Custom
Credit
supra
at 472 A;
African
Farms & Townships Ltd v Cape Town Municipality
1963 (2) SA 555
(A)
at 562 C – D). Secondly, it is a further requisite of the
exceptio rei
iudicatae
that the
cause of action or cause of claiming (
causa
petendi
) in the
proceedings in which the defence is raised must be the same as that
on which final judgment was given in earlier proceedings.
Here it is
not the form of the proceedings which determines the sameness of the
causa petendi
,
but the identity of the question raised in the earlier and subsequent
proceedings (
African
Farms
supra
at 562 C – D). In order to determine whether the question which
is pleaded as
res
iudicata
has
already been decided in an earlier case between the parties, one must
have regard to the pleadings and judgment in the earlier
case (
Van
Niewenhuizen v Richards
1959 (2) SA 686
(T)
at 687 F).
[59] In the liquidation proceedings
there were 18 applicants. Mrs Knipe was cited as applicant in various
capacities, namely in
her personal capacity, in her capacity as
executrix of the deceased’s estate and in her official
capacities as director of
the two companies and trustee of the ten
trusts. Carol took part in the applications as the fourteenth
applicant. The fifteenth
to eighteenth applicants were Carol’s
children. Andre, Johnny, Jackie and Pieter themselves were not
parties to the liquidation
proceedings. However their trusts were
parties as represented by Mrs Knipe in her capacity as trustee of the
various trusts.
[60] In the present application the
provisional liquidators have been cited as interested and necessary
parties. They were of course
not parties to the liquidation
proceedings. All the siblings are parties to the present application
in their personal capacities
(as alleged shareholders of the two
companies). As such the siblings merely stepped into the shoes of
their respective trusts which
previously were shareholders.
Accordingly the parties in the present matter correspond sufficiently
with those in the liquidation
proceedings.
[61] It is necessary to compare the
issues in the current application with those in the liquidation
proceedings in order to decide
to what extent they are similar. The
strict requirements of the
exceptio
res iudicata
,
especially relating to the requirements of “same relief”
and “same cause of action” may be relaxed in
appropriate
cases. In such an event the term “
issue
estoppel
” is
used. In the matter of
Caesarstone
Sdot-Yam Ltd v The World Of Marble And Granite CC And Others
2014 (5) SA 499
(SCA) it was stated that “
the
requirement of the same cause of action is satisfied if the
proceedings involve the determination of a question that is
necessary
for the determination of the case in which the plea is raised and
substantially
determinative
if the outcome of that latter case
.”
[own underlining and emphasis]
[62] In the matter of
Smith
v Porritt
2008
(6) SA 303
(SCA) the principle was worded as involving an enquiry
“
whether an
issue of fact or law was an essential element of the judgment on
which reliance is placed
”
.
The circumstances of a specific case may justify a relaxation of the
traditional strict rules. Each case will depend on its own
facts. The
requirements that remain are that the parties must be the same and
that the same issue must arise. When considering
whether the same
issue arises, the enquiry focuses on whether an issue of fact or law
was “
an
essential element of the judgment on which reliance is placed
”
.
Considerations such as equity and fairness to the parties themselves
as well as to others are to be considered.
[63] In order to properly consider whether issue
estoppel is applicable in the present matter, it will of necessity
require a careful
analysis of the factual and legal questions dealt
with in the previous litigation as compared to those in the present
application.
The various judgments in the liquidation proceedings
were all attached to the Respondents’ opposing papers. The
judgment
of Daffue J granting a final order of liquidation has also
been reported as
Knipe and Others v Kameelhoek (Pty) Ltd and
Another
2014 (1) SA 52
(FB).
APPLICATION FOR PROVISIONAL
LIQUIDATION: JORDAAN J
[64] The initial applications to have
the two companies provisionally liquidated were heard by Jordaan J.
He dismissed the applications.
The following extracts from his
judgment are relevant for purposes of considering the applicability
of issue estoppel:
“
. . .
it
is common cause that the trusts have been dissolved and the question
whether they [the trusts themselves] are still shareholders
is in
dispute. It is in dispute whether the shares have been legally
transferred to the children, but as it stands at the moment
it
appears that the transfer of the shares has been registered and the
trusts are therefore not shareholders anymore
.”
[65] This
dictum
forms part of the
portion of the judgment where the
locus
standi
of the
various trusts to launch liquidation proceedings were considered. As
such it does not directly assist in adjudicating the
question
regarding whether the shareholding ratio has been
decided
.
Jordaan J was however alive to the fact that there are disputes
relating to the transfer of the shares by Mrs Knipe to the siblings.

The same holds true for the following
dictum
from the same judgment:
“
. . .
the
deceased meant to transfer the shares to his children. That was what
actually happened in the meantime, although the legality
of that is
now disputed
.”
[66] Jordaan J directly dealt with
the issue regarding shareholding only in as far as it was relevant to
the parties’
locus
standi
to either
launch the liquidation application or to oppose it. He did not decide
any question regarding the shareholding ratio as
such, but rather
concerned himself with whether it is the trusts or the beneficiaries
of the trust that are or were shareholders.
As a result this judgment
is not helpful in the current application.
PROVISIONAL LIQUIDATION:
FULL BENCH
[67] An appeal against the dismissal
of the provisional liquidation application was heard by a Full Bench
of this Division on 23
July 2012. I quote the following relevant
portions of the judgment (own underlining and emphasis):
“
[4] At the time of his
death [that is in 2007] the deceased was the sole director of both
Kameelhoek and Schaapplaatz (the companies).
The shares in the
companies were held by family trusts of which the deceased and Mrs
Knipe were the trustees.
Their
five children were the equal beneficiaries of the trusts
.”
“
[6] . . . counsel for the
appellants [...] correctly accepted that the appeal should be decided
on the basis that each of the five
Knipe children holds 20% of the
shareholding in each of the companies. It must be added that even on
the evidence of Mrs Knipe
in this regard, which is not necessary to
discuss in detail, it is clear that it is intended that the shares in
the company will
eventually
at
least
be
transferred to Carol, Jacqueline, John and André
.”
“
[18] I am satisfied also
that the companies were intended by the deceased to be family
companies wherein
all
his children
would be entitled to participate
equally
on the basis of mutual trust and confidence.
”
[68] In this judgment the
relationship between the siblings and thus the shareholders of the
companies was referred to in the context
of the question whether it
would be just and equitable to dissolve the companies. The
relationship between the shareholders was
also referred to in order
to come to the conclusion that there is no reasonable possibility of
the shareholders working together
within the structures of the
company. As such, the question of the actual shareholding
ratio
was not
decided
.
It was however, for purposes of considering the basis for the
liquidation application, accepted that there are disputes between
the
siblings, some of which disputes relate to shareholding.
FINAL LIQUIDATION: DAFFUE J
[69] The final orders of liquidation
were granted by Daffue J on 27 June 2013. I quote a relevant portion
of his judgment:
“
[12] It is also common
cause that prior to the provisional winding-up order, André,
Johnny and Jackie managed the affairs
of the companies to the
exclusion of Carol and Pieter and to be able to do so, they had to
remove the sole director, Mrs Knipe,
and the one person who as
trustee of the various trusts dissolved those trusts and allocated
the shares to her
five
children in equal proportions
.”
[own emphasis]
This portion of the judgment does not
decide
the shareholding issue and does not even consider the correctness of
Mrs Knipe’s allocation of shares. It does however reflect
on
the manner in which the issue has been dealt with by the siblings in
affidavits, being an acceptance of Mrs Knipe’s allocation.

Daffue J lists several facts which are [according to him] not in
issue. I quote some of the relevant “facts” so listed:
“
15.5 On 15 April 2008 it
was accepted that
[sic]
by all and sundry
that the five children of the deceased and Mrs Knipe would equally
share in the proceeds of the two farms . .
.
”
“
15.6 Mrs Knipe, in her
capacity as sole trustee, terminated all the trusts and thereafter
transferred the shares in the two companies
to the five children in
equal proportions and this equal allocation was accepted by all. . .
. the three newly appointed directors
obtained so-called evidence
that André and Johnny are each entitled to 42% shareholding in
each company and Carol and Jackie
8% each. These “facts”were
suppressed from the court a quo and the Full Bench. This is now their
case notwithstanding
their earlier acceptance of equal shareholding
.”
[70] What is then clear from these
quoted passages are that Daffue J was alive to the fact that Andre
and Johnny in their affidavits
accepted that the shareholding ratio
declared by Mrs Knipe was correct and that it was only at a very late
stage in the liquidation
proceedings that they attempted to amend
their stance and asserted that they each are in fact holders of 42%
of the shares in each
company.
[71] The evidence that Andre and John
wished to introduce was none other than the reports of De Jager and
Pretorius and the historical
data referred to in the reports. Daffue
J deals with these reports and historical data by stating:
“
These letters and reports
are not under oath, but notwithstanding this, all beneficiaries in
the presence of their respective attorneys
accepted at the offices of
Duncan and Rothman attorneys in Kimberley on 15 April 2008 that the
five children should be regarded
as equal beneficiaries of the farms
owned by the two companies. Everyone also accepted the equal
allocation of shares when Mrs
Knipe dissolved the trusts in 2009. It
is also strange that notwithstanding the information allegedly
obtained from the auditors
as long ago as October 2010 pertaining to
what their shareholding in the companies should be, these facts were
suppressed and not
conveyed to the court in the initial opposing
affidavits. Therefore the Full Bench accepted that the five children
are equal shareholders
in the two companies
.”
[Daffue J here touched on an event
which took place during April 2008. I will deal with that event later
in this judgment.]
[72] Daffue J does not then proceed
to
decide
the shareholding ratio, but continue to
accept
equal shareholding on the same basis as it was accepted by the Full
Bench. He used the sudden emergence of the “new”
facts as
indicative of the various disputes between the shareholders and the
discord within the companies. To quote: “
The
insistence by André, Johnny and Jackie that the twins are
entitled to 42% shareholding each in both companies is a major
cause
for concern which must have contributed to the distrust
.”
This distrust (or dispute) between the shareholders of the companies
is then used as basis for a finding that it would
be just and
equitable to liquidate the two companies.
[73] It is therefore not the
shareholding
ratio
as such which formed an essential element of Daffue’s judgment,
but the fact that there is a dispute regarding the shareholding
(or
put differently, that there are disputes between the siblings
regarding their shares).
[74] Daffue J considered alternatives
to liquidation such as business rescue. He comes to the conclusion
that such alternatives
are not viable in the light of the disputes
regarding the shareholding ratio. In as far as it may play an
important role in alternatives
to liquidation Daffue J then
specifically remarks that “
it
is not possible to adjudicate the issue of the shareholding ratio on
the papers. . .
.”
(at paragraph 47 of his judgment). The way in which this remark is
worded, makes it clear that Daffue J did not decide
the shareholding
ratio but dealt with the liquidation application in the absence of a
clear decision on that point, or rather in
the presence of a dispute
regarding the matter.
[75] In the premises I do not agree
with the Respondents’ contention that the Full Bench and Daffue
J definitively pronounced
on and decided the shareholding ratio. The
exact ratio in itself was not an essential element of the judgments,
but rather the
disputes surrounding the issues. The comments made in
the various judgments do however assist the Respondents as it throws
a spotlight
on the manner in which the Applicants have previously
approached the question of the shareholding ratio.
ACCEPTANCE OF SHAREHOLDING
RATIO
[76] Averments made by the Applicants
in earlier affidavits and other pleadings form the basis of an
argument that may better assist
Pieter and Carol in opposing the
claims by the Applicants. The averments also open up questions
regarding the Applicants’
bona
fides
and intention
with the current application.
[77] Daffue J’s judgment is
important in that it highlights the fact that the Applicants at
various times accepted that the
Knipe children are equal
shareholders. This “acceptance” should now be considered
in order to see whether it does not
put an end to the Applicants’
case.
[78] In their Replying Affidavit in
the current application the Applicants alarmingly attack even the
factual findings of Daffue
J. They allege that Daffue J “
did
not have all facts at his disposal
”
(a
situation for which the Applicants only have themselves to blame).
They allege in paragraph 58.1 that “
had
he been appraised of the information contained in the Applicants
papers in this application, as well as of the fact that the
First and
Second Respondents clearly have no answer thereto, he would no doubt
have expressed a different view
.”
The entire appeal procedure has been exhausted. By attacking Daffue
J’s judgment and the findings he made, the Applicants
appear to
attempt to circumvent portions of his judgment. Such an approach is
of course inappropriate and unacceptable.
[79] The Applicants attempt to
explain their reason for not placing the shareholding ratio in issue
in the previous litigation in
the following manner:
“
The reason why the true
position was not placed before the court from the outset is that when
the issue first raised its head during
the course of the removal
application, Adv Willie Steyn (our counsel in that matter) advised us
not to include our version regarding
the shares held by the various
trusts in the papers . . .
”
“
As a result of the
aforementioned advice, the removal application was dealt with on the
basis that each of the deceased’s
children was an equal
beneficiary (and accordingly an equal shareholder post termination of
the trusts), despite the fact that
this was not the true position.
Unfortunately this “assumed position” also permeated the
papers in the liquidation
application . .
.”
[The removal application referred to
in the quoted passages refer to an application by Pieter, Jackie and
Andre for Mrs Knipe’s
removal as trustee of the trusts and
executrix of the deceased’s estate. That application was
brought under case number 1568/2007
in the Kimberley High Court.]
[80] The judgment of Daffue J
explains how the matter was canvassed by the Applicants throughout
the liquidation proceedings. The
Applicants’ explanation now as
to how they merely acted on legal advice issued to them, do not
convince and are at odds with
the various other instances where they
indicated their acceptance of Mrs Knipe’s equal allocation.
[81] First and Second Applicants
issued separate summonses out of the Northern Cape High Court against
Mrs Knipe. In the summonses
the Applicants aver that they are
entitled to 20% of the nett assets of the Jansen Knipe Trust and the
Knipe Kinder Trust (
i.e.
the two master trusts). They do this by referring to the notice of
dissolution issued by Mrs Knipe and use that as their cause
of
action. The summonses followed letters of demand wherein the First,
Second and Third Applicants insisted that they are entitled
to 20% of
the assets of the trusts. First and Second Applicants specifically
did not insist that they are entitled to
at
least
20% (as one
might have expected based on their current view of the matter).
[82] In their opposing affidavits the
First and Second Respondents also refer to other litigation in the
Northern Cape Division
where one or more of the Applicants dealt with
the shareholding ratio as being equal. Portions of the various
affidavits filed
in that litigation were attached to the papers. I do
not find it necessary to refer to each and every one of these
affidavits as
they are merely further instances where the Applicants
chose (under oath) not to present their assertions as to the
shareholding
ratio. The Applicants’ explanation for these is
also that they acted on legal advice that was given to them.
[83] The Applicants further showed
acceptance of the ratio in which the shares were allocated by Mrs.
Knipe through conduct other
than litigation. On 23 July 2010, in a
letter by De Jager, notice is given of a shareholders’ meeting
to be held in respect
of the two companies. A copy of the agenda of
the proposed meeting was attached to the letter. The Notice of Annual
General Meeting
of the companies was signed by the three Applicants
referring to themselves as being 20% shareholders (“
aandeelhouer
20%
”
). De
Jager acted as chairperson of the shareholders’ meeting. At the
meeting Pieter was referred to as a shareholder with
the right to
vote (“
aandeelhouer
met stemreg
”
).
The minutes of the meeting was kept by De Jager, who now wants the
court to rely on his report wherein he indicates that Pieter
is no
longer a shareholder of the companies and that he (that is De Jager)
at all times knew that this is not the case. From the
available
minutes it indeed appears as if no one at the meeting mentioned that
they are of the view that Pieter is not a shareholder
at all. It was
at this meeting where Andre, Johnny and Jackie fired Mrs Knipe as
director of the two companies, voted that the
three of them be
appointed as directors and appointed a new company secretary (De
Jager) and auditor (Pretorius). All of this was
done on the basis of
each sibling holding 20% shares in each company.
[84] In the Replying Affidavit the
Applicants explain that “
the
Applicants had no option but to rely on the “shares” so
“issued” to them by Mr. Viljoen since this was
the only
evidence they had, at the time, that they possessed any shares
whatsoever . . .
”
The
question presents itself as to why the Applicants would think that
any person may have questioned whether they are shareholders
or not.
Why did the Applicants find it necessary to present proof of their
shareholding?
[85] On 27 August 2010 De Jager wrote
a letter to CIPRO requesting that the deregistered company
Schaapplaatz be restored as a company
with
five
shareholders. No indication was then given that the shareholding
ratio was being disputed or that investigations were underway.
[86] During April 2008 a meeting was
held at the offices of Duncan & Rothman Attorneys in Kimberley
concerning the estate of
the deceased. At the meeting an agreement
was reached concerning the two companies and the shareholders. Andre
and Johnny undertook
to make an offer for the shares held by the
trusts of Jackie, Carol and Pieter. Such an offer does not make sense
if Pieter’s
trusts at the time no longer possessed any shares.
In their Replying Affidavit the Applicants admit (in paragraph 55.3
thereof)
that “
on
15 April 2008 all the Knipe children believed they would share
equally in the proceeds of the two farms
.”
The farms are the only assets of the two companies.
[87] At all relevant times before the
launching of the present application, the Applicants accepted that
the siblings hold equal
shares, or they at least acted as if they do
not dispute it. This not only colours the credibility of the
Applicants in a negative
way, but is also not assisting the
Applicants in discharging their onus of proving that they are
entitled to the relief claimed
in their Notice of Motion.
[88] The present application was
issued about two weeks after the Applicants brought an application to
convert the liquidation proceedings
concerning the two companies into
business rescue proceedings. The timing of the business rescue
application is significant. The
shareholding ratio as contended for
by the Applicants is crucial for their business rescue application.
The Applicants accept as
much, as is evident from paragraph 10.3 of
the Replying Affidavit:
“
.
.
. the applicant’s
[sic]
are of the view that
the outcome of this application will have a material impact on the
determination of the business rescue application
and that this
application should therefore be heard first
.”
[89] In an earlier paragraph the
Applicants provides reasons as to why the business rescue application
as well as the current application
was brought. One of these reasons
is worded as follows:
“
.
.
. in order to ensure that various beneficiaries of the trusts are
allocated (and receive) the correct shareholding in the companies

that is due to them in terms of the provisions of the respective
trust deeds
.”
One would therefore have expected the
shareholding application to have been launched first or at least
simultaneously with the application
for business rescue. It could
also have been expected of the Applicants to have launched the
present application much earlier.
[90] The Applicants’ real
motive with the business rescue application has been placed under
suspicion by the Respondents who
contend that it is merely a method
of frustrating the winding-up processes. By the mere issuing of the
business rescue application
the Applicants did in fact manage to halt
the liquidation proceedings and the activities of the provisional
liquidators. However,
if it was the Applicants’ intention to
use the business rescue application merely to prevent the liquidation
processes from
proceeding properly one would have expected them to
have launched that application much sooner.
[91] It seems that especially the
First and Second Applicants are overwhelmingly concerned with
receiving what they feel they deserve,
namely 42% of the shares of
each company each. If this is indeed the case, it is even more
incomprehensible why the Applicants
in previous litigation chose not
to attack the equal shareholding scenario (at least not until it was
too late). The explanation
as to the advice they received from
counsel does not exempt the Applicants from the fact that they
previously deliberately chose
not to rely on the ratio they now
vehemently try to assert (and their decision was reflected under
oath).
[92] It is not that the Applicants
only learned of the possibility that the shares may not be held in
equal proportions after the
trusts had already been terminated. In
fact, they blame Mrs Knipe’s actions in terminating the trust
on the fact that she
knew that Johnny, Andre and Jackie were
asserting a different share ratio. In paragraph 6.8 of his affidavit,
the First Applicant
deals with Mrs Knipe’s decision to
terminate the trusts and avers:
“
Her decision to do
[sic]
was prompted by the
fact that Pieter, Jackie and Andre had brought the removal
application
[to
remove her as trustee of the trusts]
against
her, coupled to the fact that we were asserting at the time (as we
still do) that the trust’s
[sic]
created for my and
Andre’s benefit held 84% of the shares in the companies between
them . . .
.”
[93] The Applicants’ past
acceptance of an equal shareholding ratio brings the principles of
estoppel proper into play. As
a consequence of their previous words
and conduct the Applicants now stand to be precluded from denying
that the various individual
trusts held the shares in the companies
in equal proportions.
[94] It was argued that the
probabilities
lean more in favour of the Respondents’ contentions regarding
the shareholding ratio. The companies were initially designed
to
eventually be run and managed by all the children who were to hold
the shares in the companies in equal proportions. The deceased

attempted to treat his children equally. Nothing was placed before
any court this far to indicate that some significant event took
place
to change this, at least not to the benefit of Andre and Johnny. If
the deceased did indeed favour one of his children, it
appears to be
Carol. The deceased appointed her as manager of both farms and gave
her exclusive hunting rights. It has not been
explained why the First
and Second Applicants would have been treated so much more
beneficially than their siblings (as the Applicants
allege) or why
Carol’s shares would be decreased dramatically. It has been
held that a court should, in deciding disputed
facts in application
proceedings, always be cautious about deciding probabilities in the
face of conflicts of facts in the affidavits
(
Buffalo
Freight Systems v Crestleigh Trading
2011 (1) SA 8
(SCA) at 14 D – F). In
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) it was held at 290 E - F that, unless the
circumstances are special, motion proceedings “
cannot
be used to resolve factual issues because they are not designed to
determine probabilities
”
.
As a general rule, decisions of fact cannot properly be founded on a
consideration of the probabilities unless the court is satisfied
(i)
that there is no real and genuine dispute on the facts in question,
or (ii) that the one party’s allegations are so far-fetched
or
so clearly untenable or so palpably implausible as to warrant their
rejection merely on the papers, or (iii) that
viva
voce
evidence would
not disturb the balance of probabilities appearing from the
affidavits.
DISCRETION TO ALLOCATE SHARES
[95] On behalf of the Applicants it
was argued that an adjudication of the declaratory relief claimed by
the Applicants necessarily
involve the determination of the question
whether or not the trust deeds in fact conferred on Mrs Knipe the
discretion to allocate
the assets of the trusts as she wished.
Unfortunately for the Applicants, and as can be seen from the aspects
already dealt with,
their case meets with obstacles before it is even
necessary to consider whether Mrs Knipe had the necessary power to
allocate the
shares in the matter that she did. In adjudicating the
Applicants’ application it makes no sense to first adjudicate
whether
Mrs Knipe had the necessary discretion and only then to
consider what the correct shareholding ratio was.
[96] The powers of Mrs Knipe come
into play when the counter-application is considered.  The
parties differ in their interpretation
of the powers and duties that
Mrs Knipe (as trustee of the various trusts) possessed at the time
that she terminated the trusts.
The Applicants submit that as trustee
she was obliged to hold the capital of the trust assets in respect of
each of the ten trusts
for the benefit of the specific beneficiary of
each trust and that she was further obliged, upon termination of
every such trust,
to pay out the capital or income held by each trust
for the benefit of the specific beneficiary. Mrs Knipe was therefore
not at
liberty to redistribute the issued share capital amongst the
siblings in the manner that she did. She had to follow the ratio in

which the shares were held by each trust, being 42% each for the
First and Second Applicants, 8% each for the Third Applicant and

First Respondent, and 0% for the Second Respondent.
[97] The First and Second Respondents
on the other hand contend that the trust deeds provided for the
trusts to be discretionary
trusts and that Mrs Knipe was therefore at
liberty to distribute the trust assets as she saw fit. The First and
Second Respondents
assert that Mrs Knipe was entitled to allocate the
shares as she pleased as she had an absolute and unfettered
discretion in terms
of the trust deeds. The First Respondent launched
a counter-application for an order declaring that Mrs Knipe acted
correctly in
the way that she allocated the shares in the two
companies amongst the siblings. The Second Respondent appears not to
join in that
application.
[98] The Respondents do not primarily
rely on the contention that Mrs Knipe happened to allocate the shares
in the correct ratio.
The Applicants bitingly point this out in their
reply to the Respondents’ opposition:
“
A stark feature of the
Respondent’s papers is that they contain no objective evidence
of any probative value in support of
the contention that the
“allocation” made by Mrs. Knipe corresponds in the
slightest with the shareholdings actually
held by the various trusts
at the time of the deceased’s death and at the time when she
made the “allocation”.
Rather, their contention appears
to be that Mrs Knipe was at liberty to allocate the shares at will
without any reference or regard
to the actual allocation of the
shares at the time of the deceased’s death
.”
[99] On the Applicants’ suggestion, Mrs Knipe
should have made enquiries of her own before allocating the trust
assets. There
is no information before this court as to what extent
she may have attempted to do so. Should Mrs Knipe indeed have
investigated
the situation at the time, she would presumably have
been confronted with little more than the documents, opinions and
half-forgotten
memories currently before this court. She too would
have had difficulty in penetrating through the quagmire of
contradictory information.
[100] The Applicants do not
specifically claim that the decisions made by Mrs Knipe in regard to
the allocation of the assets of
the trusts should be set aside. This
may however be inferred from the relief that they do claim.
Significantly the Applicants do
not complain about the allocation of
any other assets held by the trusts at the time of termination. In
fact no information has
been provided as to the totality of actual
assets held by each trust at the time of determination.
[101] The Applicants attempted to
undo Mrs Knipe’s actions by issuing instructions for the
reconstitution of the Registers
of Members. They now need declaratory
relief that would effectively ratify their actions. One would have
expected this application
to have followed immediately upon the
majority shareholders’ instruction to De Jager to investigate
the matter and prepare
reconstituted Registers of Members. They
arranged for new Registers of Members and share certificates contrary
to the allocation
by the sole trustee of the trusts at the time of
its termination and proceeded to act as if Mrs Knipe did not allocate
the shares
in the ratio she did. At the very latest, the Applicants
should have approached the court during the applications for the
winding-up
of the companies as they must have realized then that the
shareholding ratio were to come into play during the liquidation and
distribution processes carried out by the liquidators.
[102] The First Respondent requests
specifically that the resolution of Mrs Knipe as to the allocation of
the trust assets (specifically
the shares) be declared lawful, valid
and binding. It follows that she wishes this court to do so on the
basis of the evidence
and legal arguments presented in the
application papers. The arguments used in opposition to the
Applicants’ application
are also used as basis for the relief
claimed in the counter-application.
DISPUTES OF FACT
[103] There are serious factual
disputes between the Applicants on the one hand and the First and
Second Respondents on the other
regarding (
inter
alia
) the
shareholding ratio and whether this had changed during or around
1983. This much was clear even before the application for
declaratory
relief was launched. Daffue J was already alive to this fact and
commented thereon. Still the Applicants insisted on
approaching this
court on affidavit. They did this despite their appreciation of the
fact that the matter should be adjudicated
through action procedures.
[104] In a letter addressed to the
First Respondent’s attorney, the attorneys representing the
Applicants included the following
paragraph:
“
Ons is van mening dat die
Hof genader moet word om ‘n verklarende bevel te gee rakende
die onderskeie persentasie aandeelhouding
in die maatskappye. Uit die
aard van die saak is daar voorsienbare feite dispute wat ons insiens
nie by wyse van ‘n aansoek
opgelos kan word nie en dat daar
derhalwe dagvaarding uitgereik sal moet word
.”
In the same letter alternative
methods of dispute resolution is discussed, such as an inquiry by the
liquidators in terms of sections
417 and 418 of the Companies Act and
arbitration.
[105] The Applicants explain their
decision to issue application proceedings in paragraphs 6.1 and 6.2
of their affidavit in reply
to the Second Respondent’s
opposition. This explanation should best be dealt with in the
Applicants’ own words:
“
6.1   It is
indeed so that the Applicants realized that the shareholding ratio in
the companies may be placed into dispute.
It is further correct that
the Applicants declined the invitation to address such dispute
through the mechanisms created by Sections
417 and 418 of the
Companies’ Act, 61 of 1973 and suggested that the matter be
dealt with by way of Arbitration. The Respondents,
however, failed to
consent to Arbitration.
6.2
Pursuant to having sought further legal advice in the wake of the
Respondent’s failure to consent
to Arbitration it was brought
to the Applicants’ attention that the shareholding dispute
would, no doubt, be capable (at
least a large extent) of resolution
on the basis of the historical documents relied on by the Applicants
thus of resolution by
means of application proceedings. The
Applicants still respectfully hold this view
.”
[106] An application may be dismissed
with costs when an applicant should have realised when launching the
application that a serious
dispute of fact was bound to develop (See:
Room Hire Co
(Pty) Ltd v Jeppe Street Mansions (Pty
)
Ltd
1949 (3) SA
1155
(T) at 1162). Where in proceedings on notice of motion disputes
of fact have arisen on the affidavits, a final order, whether it
be
an interdict or some other form of relief, may be granted if those
facts averred in the applicant’s affidavits that have
been
admitted by the respondent, together with the facts alleged by the
respondent, justify such an order (See:
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty
)
Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634 H – I).
[107] In the matter of
SH
v GF
2013 (6)
SA 621
(SCA) at 626 G – H the principles relevant to disputes
of fact in motion proceedings were aptly summarized as follows:
“
It is trite that in the
case of factual disputes in motion proceedings the version of the
respondent must be accepted for purposes
of determination thereof,
irrespective of where the onus lies, unless that version consists of
bald or uncreditworthy denials,
raises fictitious disputes of fact,
is palpably implausible, far-fetched or so clearly untenable that the
court is justified in
rejecting them merely on the papers
.”
[108] No party has requested me to
refer the matter for oral evidence. All insisted that the matter be
adjudicated on affidavit,
despite the existence of various factual
disputes. I have seriously considered whether the time has not
arrived for these parties
to face off against each other by means of
oral testimony. At first blush it presents as a practical solution to
dealing with the
various factual disputes and issues of credibility.
The reality however dictates that the leading of oral evidence may
not assist
at all. The deceased would have been the primary witness
as to what transpired and how the shareholding issue was dealt with
during
the seemingly crucial period of 1983. His version will
unfortunately never be heard. The various historical documents will
not
assist without the oral evidence of persons who can authenticate
the various documents or who has independent memories of the exact

events. That leaves us with “after the fact” witnesses
such as De Jager and Pretorius who base their opinions primarily
on
some, and not all, of the historical documents. Doreen Barlow already
made it clear that she has a very limited independent
memory of
events during the relevant period.
[109] It is furthermore undesirable
that a court
mero
motu
orders a
referral to oral evidence. This much is clear from cases such as
Joh-Air (Pty) Ltd
v Rudman
1980
(2) SA 420
(T) at 197 A – B and
Buffalo
Freight Systems v Crestleigh Trading
2011
(1) SA 8
(SCA) at 14 E.
[110] The facts alleged by the First
and Second Respondent, together with the few allegations made by the
Applicants that the Respondents
actually admit, are not such that an
order can be granted in favour of the Applicants. The documents
presented by both parties
are contradictory. This conflict does not
assist the Applicants in discharging their onus. The application
stands to be dismissed.
Furthermore, by virtue of the Applicants own
words and actions in the past they are estopped from asserting an
unequal ratio.
COUNTER-APPLICATION
[111] In the counter-application the
First Respondent is confronted with the same difficulties regarding
factual disputes when dealing
with the shareholding ratio relying on
documents. The First Respondent’s case in the
counter-application is bolstered by
the principles of estoppel (as
set out above). Adjudication of the counter-application however
specifically involves the question
as to whether Mrs Knipe acted
correctly and properly in accordance with the trust deeds when she
reallocated the shares amongst
the siblings. This necessarily
involves an interpretation of the two trust deeds.
[112] In general the rules relating
to the interpretation of written contracts are applicable to
interpreting a trust deed (See
Worman
V Hughes and Others
1948 (3) SA 495
(A) at 505;
Delmas
Milling Co Ltd v Du Plessis
1955
(3) SA 447
(A)
at
453). The relevant principles have been reiterated in the matter of
Sea Plant
Products Ltd and Others v Watt
2000
(4) SA 711
(C) at 720 D to 721 C:
“
Applied particularly to a
trust deed, the exercise in interpretation involves determining the
intention of the settlers of the trust
as expressed by them in the
trust deed . . . where there is an ambiguity in the document, an
interpretation favouring the basic
purpose and scope of the trust
deed must be preferred. . . .  The trust deed speaks from the
time of its execution. . . .
As with the interpretation of a
written contract, the point of departure in interpreting a trust deed
is therefore the grammatical
or ordinary meaning of the words used,
read within the context of the trust deed as a whole
.”
[113] In
Coopers
& Lybrand and Others v Bryant
[1995] ZASCA 64
;
1995 (3) SA 761
(A) the traditional technique of interpreting written
contracts was summarized at 767 E – 768 E:
“
According to the “golden
rule” of interpretation the language in the document is to be
given its grammatical and ordinary
meaning, unless this would result
in some absurdity, or some repugnancy or inconsistency with the rest
of the instrument. . . .The
correct approach to the application of
the “golden rule” of interpretation after having
ascertained the literal meaning
of the word or phrase in question is,
broadly speaking, to have regard:
(1) to the context in which the word or phrase is
used with its interrelation to the contract as a whole, including the
nature and
purpose of the contract . . .;
(2) to the background circumstances which explain the
genesis and purpose of the contract. . .;
(3) to apply extrinsic evidence
regarding the surrounding circumstances when the language of the
document is on the face of it ambiguous,
by considering previous
negotiations and correspondence between the parties, subsequent
conduct of the parties showing the sense
in which they acted on the
document, save direct evidence of their own intentions
.”
[114] In the present matter the trust
deeds are clear on who the beneficiary of each trust was to be. Each
trust had one of the
siblings as a beneficiary. It is common cause
that the trusts were created to benefit the Knipe siblings. In
paragraph B of the
preamble it is recorded that the trusts were
create “
in
consideration of the natural love and affection
”
which the donors (the siblings’
grandfathers) had for the siblings. Clause 2 provides a clue as to
what the trust assets were
meant to be.
“
The Donor hereby donates
unto and in favour of the Trustee, in his capacity as such, the sum
of R500,00 in respect of each one of
the Donees which, together with
any other assets which the Trusts may at any time hereafter acquire,
either by donation from the
Donor or by donation from any other
person or by acquisition with the assets of the Trusts, are
all
hereinafter referred to as “the Trust Assets
”.”
[own underlining and emphasis]
Through prudent business dealings and
financial acumen the deceased did increase the assets of the trusts
to include shares in various
companies.
[115] The trust deeds contain
numerous clauses elaborating on the powers of the trustees in dealing
with the trust assets. So clause
5 of the deeds bestows on the
trustee(s) an “
absolute
and unfettered discretion
”
to
invest and deal with the trust assets for the
purpose
of the trusts. The words “
absolute
and unfettered discretion
”
are
used on a number of occasions throughout the trust deeds, always with
reference to dealings with trust assets. The trust deeds
do not
contain any specific provision that limits the powers of the trustees
in dealing with trust assets other than to achieve
the purpose of the
trusts. The trusts are clearly discretionary trusts in that the
trustee was at liberty to deal with the trust
assets in any way that
would further advance the purpose for which the trusts were created.
[116] The
purpose
of the trusts was clearly to benefit the siblings (donees) equally.
Such purpose provides the background against which the trustee
was to
exercise his or her ‘absolute and unfettered’ discretion.
From the wording of the trust deeds it appears clear
that the
creators of the trusts never intended that any beneficiary was to be
treated differently than the others. The trusts formed
part of two
sets of trusts, the PG JANSEN TRUSTS and the R.L. KNIPE TRUSTS. The
very fact that each set of trusts was governed
by a master deed
reinforces the idea that the trusts were for all intents and purposes
to be treated in similar fashion. There
is no reason to suspect that
the same principle would not have been applicable at the termination
of the trusts.
[117] Clause 7 of the trust deeds
states that the trustee(s) shall hold the capital of the trust assets
for the benefit and advantage
of the donees. It was envisioned that
the trust of each sibling will terminate when the specific done
reached the age of 40 years.
It was also provided that “
if
the trustee is of the opinion that circumstances have arisen or might
arise to warrant his doing so, he shall be empowered in
his sole,
absolute and unfettered discretion, either to terminate the trusts in
whole or in part at a time or times prior to the
aforementioned date
of determination and to pay out to the donees the Trust Assets . . .
”
Clause 8 deals with a situation where
one of the beneficiaries died prior to the determination of his or
her trust. In such circumstances
the trust assets held by his or her
trusts were to devolve in equal shares upon “
his
or her lawful surviving issue or, failing such lawful surviving issue
– the surviving Donees . . .”
[118] The wording of the trusts deeds
all point towards equal treatment of the trusts. The powers of the
trustee(s) were discretionary
so as to ensure that all available
means could be used to further the purpose for which the trusts had
been created. Through her
actions when terminating the trusts and
allocating the assets held by the trusts, Mrs Knipe happened to give
proper effect to the
intention and purpose with which the trusts were
created in 1979. She treated the trusts (and its beneficiaries)
equally. It mimics
the manner in which the deceased dealt with the
trusts.
[119] Even if the trusts were not
discretionary trusts, it is clear from what has already been
discussed that it was not known at
the time of termination of the
trusts what the exact assets of each trust were (at least as far as
the shares in Kameelhoek and
Schaapplaatz go). On determination of
the trusts, Mrs Knipe had to distribute the assets in line with the
purpose of the trusts.
She had to do this on the basis of the
information available at the time. On the papers before me it cannot
be found that Mrs Knipe
acted incorrectly in the manner in which she
allocated the trust assets. In the result, the notice of termination
(“Kennisgewing
van Ontbinding van Trusts”) by Mrs Knipe
is to be declared valid and binding. The same goes for her resolution
dated 20 August
2009.
[120] Section 115 of the Companies
Act, 61 of 1973, deals with the rectification of the register of
members of a company. Subsection
115(1)(a) provides that:
“
If the name of any person
is, without sufficient cause, entered in or omitted from the register
of members of a company . . . the
person concerned or the company or
any member of the company, may apply to the Court for rectification
of the register
.”
Essentially an application under
section 115 is concerned with title to be on the register and not
with ownership of shares (See
Verrin
Trust & Finance v Zeeland House and Others
1973 (4) SA 1
(CPD) at 9 G - H). “
A
Court hearing such an application may, therefore, quite properly
confine itself to the minor and direct dispute as to whether
the
register should be rectified or not and leave it to the parties
thereafter to debate the question of ownership in a trial action
.”
(
Verrin
supra
at 9 H)
[121] The relief claimed by the First
Respondent in prayer 3 of the Notice of Motion in the
Counter-Application deals with the contents
of the register of
members and with the question as to which persons should be
registered as members. As a result of Mrs Knipe’s

determination, all the siblings should appear as members on the
Registers of Members for Kameelhoek and Schaapplaatz.
[122] Prayers 5 and 6 of the First
Respondent’s counter-application relates to the alleged
unethical conduct of the two auditors,
Pretorius and De Jager. No
arguments were presented in regard to these prayers. Although the
manner in which Pretorius and especially
De Jager dealt with the
matter may raise eyebrows, their conduct was not such to necessitate
drastic action. Accordingly, I do
not deem it necessary to further
deal with the relief claimed in these prayers.
COSTS
[123] There is no reason why the
general rule relating to costs should not be applicable. As the
losing parties, the Applicants
should bear the costs of their own
application jointly and severally, the one paying the other to be
absolved. These costs should
include the costs of the First and
Second Respondents’ opposition. It was argued on behalf of the
Applicants that the manner
in which the Respondents opposed the
application merits a cost order against them. I do not agree with
that submission. The opposition
was dealt with in a responsible
manner and was both necessary and reasonable. Furthermore the
Applicants knew beforehand that the
adjudication of the relief they
claimed would elicit serious factual disputes that cannot be
adjudicated on affidavit. The Respondents
had no choice other than to
deal with all such disputes.
[124] The First Respondent engaged
the services of two counsel. It was not argued that the First
Respondent would not be entitled
to the costs of two counsel. The
Respondents submitted that the Applicants should be ordered to pay
the costs of opposition on
a punitive scale. Following through on the
various comments made above regarding the manner in which the
Applicants chose to deal
with issues relating to the shareholding
ratio, I agree that this is a proper case for a punitive cost order.
[125] The counter-application
launched by the First Respondent is closely intertwined with her
opposition to the main application
itself. The Applicants appreciated
this close link and used their replying affidavit in response to the
First Respondent’s
opposition also as opposing affidavit in the
counter-application. The Applicants should also be held responsible
for the costs
incurred as a result of the First Respondent’s
counter-application.
APPLICATION TO STRIKE OUT
[126] The application by the First
Respondent to strike out certain portions of the Replying Affidavit
will now be considered. The
application is opposed by the Applicants.
By arrangement between the relevant legal representatives and me the
arguments regarding
this application were presented by means of
written submissions filed after the hearing of the main application.
In order to prevent
possible later confusion I pause to point out
that the Applicants in fact filed two replying affidavits. One
carries the heading
of “
Applicants’
Replying Affidavit (to Second Respondent’s Answering
Affidavit)
”
.
The other is merely titled “
Applicants’
Replying Affidavit
”
.
The application to strike out is levelled at this last mentioned
replying affidavit and I will henceforth only refer to this one
as
the replying affidavit. The replying affidavit is deposed to by the
First Applicant. Neither the Second nor the Third Applicant
deposed
to confirmatory affidavits.
[127] The First Respondent primarily
contends that the replying affidavit contains new matter that should
have been dealt with in
the founding papers, as well as hearsay
evidence. The various paragraphs objected to, are detailed in the
application to strike
out.
(a) New material
[128] The general rule is that an
applicant must stand or fall by the founding affidavit and the facts
alleged in it and that, although
sometimes it is permissible to
supplement the allegations contained in that affidavit, still the
main foundation of the application
is the allegation of facts stated
there, because those are the facts that the respondent is called upon
to either affirm or to
deny. If the applicant merely sets out a
skeleton case in supporting affidavits, any fortifying paragraphs in
the replying affidavit
will be struck out. If facts alleged in the
respondent’s answering affidavit reveal the existence or
possible existence of
a further ground for the relief sought by the
applicant, the court will allow the applicant in a replying affidavit
to utilise
and enlarge upon what has been revealed by the respondent
and to set up an additional ground for relief arising from the
answering
affidavit. See:
Shakot
Investments (Pty) Ltd v Town Council of the Borough of Stanger
1976 (2) SA 701
(D).
[129] A letter purportedly written on
behalf of Arthur Young & Co. is attached as annexure “
RA6
”
to the replying affidavit. The Applicants do not explain where, by
whom, and more importantly when this letter was discovered.
The
letter is not dealt with in the reports of De Jager or Pretorius,
despite the fact that both gentlemen intended to convey that
they
made use of all available historical documentation in compiling their
reports. One would therefore have expected this letter
to have been
dealt with by either Pretorius or De Jager and as such the letter
should have been attached to the founding papers.
The Applicants do
not explain why this was not done. In the result the letter and the
reference thereto in paragraph 20.1.10.2.1
of the Replying Affidavit
amount to new material and should be struck out.
[130] Annexure “
RA7
”
is an affidavit by Abraham Frederick Van de Venter who is employed at
Standard Bank. He attempts to explain the loans made
by the two
companies during 1984 and the reason behind the letter of 15 August
1984. Such letter was comprehensively dealt with
in the founding
papers, especially through the reports of De Jager and Pretorius. By
using the affidavit of Van de Venter in reply,
the Applicants attempt
to bolster the difficulties that the unauthenticated letter and the
opinions of their experts on the letter,
present. There is no
explanation as to why the Applicants did not obtain the corroboration
that Van de Venter may be providing
when launching the application.
They should have expected an attack on the veracity of the letter and
the reports of De Jager and
Pretorius. If they wanted to corroborate
it, such corroboration should have formed part of the founding
papers. The affidavit and
the reference thereto in paragraph
20.1.10.2.2 of the Replying Affidavit is new material that should be
struck out. Van de Venter’s
affidavit also contains
inadmissible hearsay evidence that provides an additional ground for
it to be struck out.
[131] The First Respondent attacks
paragraph 22.2 of the Replying Affidavit as well as the two annexures
referred to in that paragraph
as being new material. The allegations
contained in the paragraph and the annexures attempt to refute the
allegations by the Respondents
that the Applicants at all relevant
times previously accepted the allocation made by Mrs Knipe. Those
allegations form the cornerstones
of not only the First Respondent’s
opposition to the application but also her counter-application. As
such the paragraph
under attack and especially annexure “
RA10
”
serve as opposition to the counter-application and function as more
than a mere reply. I therefore find this “new
material”
to be admissible and deny the First Respondent’s request to
have it struck out.
[132] The First Applicant also
attacks paragraphs 67.2.3 and 67.2.4 as being new material. These
paragraphs deal with the contents
of the letter of Arthur Young &
Co. which was attached to the founding papers as part of the report
by Pretorius. The contents
of the paragraphs are nothing more than
further arguments based on the contents of the letter itself. I see
no reason to strike
out these paragraphs. The same argument is
advanced against paragraph 71.2 which present as argument and/or
comment on the suretyships
in favour of Standard Bank. These
suretyships were attached to Pretorius’s report which formed
part of the founding papers.
As such it does not amount to new
material. Again I see no reason to strike out this paragraph.
(a) Hearsay evidence
[133] As a general rule, subject to
the provisions of the Law of Evidence Amendment Act, Act 45 of 1988,
hearsay evidence is not
permitted in affidavits. In various
paragraphs in the Replying Affidavit the First Applicant attempts to
protect De Jager and Pretorius
against attacks made by the
Respondents. The First Applicant on more than one occasion avers that
both De Jager and Pretorius carefully
read through the founding
affidavit before deposing to their own affidavits. Neither De Jager
nor Pretorius deposed to affidavits
confirming these averments. The
averments made by the First Applicant therefore amount to
unsubstantiated hearsay. In the result
paragraphs 34 and 41.1 stand
to be struck out.
[134] Hearsay is also contained in
paragraph 56.2. Here the First Applicant deals with knowledge that
his erstwhile advocate is
suppose to have. Again this is not
supported by any confirmatory affidavit. This paragraph should also
be struck out.
(c) Irrelevant material
[135] Paragraphs 59.2 to 59.4 deal
with the alleged good relationship that the First Applicant had with
the deceased. The First
Respondent argues that these paragraphs
should be struck out as consisting of new and irrelevant material.
The paragraphs under
attack are a direct response to paragraph 188 of
the First Respondent’s Opposing Affidavit where the First
Respondent chose
to “
bring
to the Court’s attention that the deceased did not speak to
Johnny for many years prior to his death
.”
It is therefore the First Respondent herself who invited a response.
The same of course then goes for the annexures referred
to in the
paragraphs. The First Applicant’s request to have these
paragraphs and annexures struck out is denied.
(d) Privileged documentation
[136] The Applicants attached
documentation containing privileged material to the Replying
Affidavit. Allegations surrounding the
privileged documentation was
then included in the affidavit itself. Annexures “
RA11
”
to “
RA14
”are
letters clearly carrying the note “
Sonder
Benadeling van Regte
”
.
The Applicants’ insistence in referring to the contents of
these documents leaves a bad taste. The annexures, as well as
the
paragraphs referring to them, stand to be struck out from the
Replying Affidavit.
[137] Paragraphs 26.7 to 26.11 deal
with a memorandum dictated by Loftus Viljoen (the attorney who
assisted Mrs Knipe when the trusts
were terminated). The memorandum
itself is attached as annexure “
RA15
”.
This is clearly privileged communications between attorney and client
and should never even have found its way into the
hands of the
Applicants, much less be presented in court papers. The same goes for
annexure “
RA17
”,
read together with paragraph 26.12 of the Replying Affidavit which
deal with file notes made by Loftus Viljoen. These paragraphs
and
annexures are to be struck out.
[138] “
RA18
”
is another letter by Loftus Viljoen. This letter does not have an
indication that it was written without prejudice. The
letter in
itself, as well as paragraph 26.13 that deals with it, does not take
the matter further. I decline the First Respondent’s
request to
strike out the references to this letter.
[139] “
RA19
”
is a letter written by Mrs Knipe to Loftus Viljoen and it contains
certain instructions to him regarding the shareholding
issue. This is
another document that inexplicably found its way into the hands of
the Applicants. It is clearly a document that
was only meant for the
eyes of Loftus Viljoen. This annexure, as well as paragraphs 26.14 to
26.16 that deal with the letter, should
be struck out. “
RA20
”
is once again a file note by Loftus Viljoen. This annexure, together
with paragraph 26.17 that refers to it, should be also
struck out.
[140] A mathematical examination of
the First Respondent’s application to strike out indicates that
about 23 paragraphs and
11 annexures are struck from the Replying
Affidavit. This is a substantial success for the First Respondent.
She will therefore
be entitled to an order of costs in her favour.
ORDER
[141] In the result the following
orders are made:
1.
The late filing of the
Applicants’ Replying Affidavits is condoned;
2. The following paragraphs are
struck from the Replying Affidavit filed in response to the First
Respondent’s Opposing Affidavit:
paragraphs 20.1.10.2.1,
20.1.10.2.2,  26.1 to 26.12,  26.14 to 26.17,  34,
41.1 and  56.2;
3.
The following annexures
are struck from the Replying Affidavit filed in response to the First
Respondent’s Opposing Affidavit:
“RA6”, “RA7”
and “RA11” to “RA20”;
4.        The Applicants
are ordered to pay the costs occasioned by the application to strike
out,
jointly and severally, the one paying the other to be absolved;
5.
The Applicants’
application for declaratory relief is dismissed;
6.
The Applicants, jointly
and severally, are to pay the costs of the application, including the
costs of the First and Second Respondents’
opposition thereto,
on the scale as between attorney and client;
7.
The counter-application
succeeds in that prayers 1, 2 and 3 of the Notice of Motion in the
Counter-Application are granted;
8.
The Applicants, jointly
and severally, are to pay the costs of the First Respondent’s
counter-application, on the scale as
between attorney and client;
9.
All costs orders in favour of the First Respondent shall include the
costs of two counsel.
__________________
G. J. M. WRIGHT, AJ
On behalf of the
applicants:

Adv. AR Newton
Instructed
by:
MJ van
Rensburg
Horn &
Van Rensburg Attorneys
BLOEMFONTEIN
On behalf of the first
respondent:
Adv. L Halgryn SC
Adv.
T. Halgryn
Instructed
by: L Strating
Symington
& De Kok
BLOEMFONTEIN
On behalf of the second
respondent:      Adv. D Grewar
Instructed
by: P de Lange
De
Lange & Du Plessis Attorneys
BLOEMFONTEIN
On behalf of fourth to
ninth respondents: FJ Senekal
Matsepes
Inc.
BLOEMFONTEIN