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[2013] ZAGPPHC 244
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Davel v Ukwandisa Holdings (Pty) Ltd and Another (52753/12) [2013] ZAGPPHC 244 (15 August 2013)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA (NORTH GAUTENG HIGH COURT, PRETORIA)
CASE
NO: 52753/12
DATE:15/08/2013
In
the matter between:
JOHANNES
CORNELIUS NICOLAAS
DAVEL
.....................................
APPLICANT
and
UKWANDISA
HOLDINGS (PTY) LIMITED
(REGNO:
2002/011944/07)
....................................................................
FIRST
RESPONDENT
MANKO
MICHAEL
MAFE
......................................................................
SECOND
RESPONDENT
JUDGMENT
VAN
OOSTEN J:
[1]
The applicant and the second respondent are the registered holders
respectively of 13% and 62% shareholding in the first respondent
(the
company), which conducts a lucrative broiler farming business, inter
alia being a supplier of chickens to Early Bird Farm
(Pty) Ltd. In
this application the applicant seeks an order that certain documents
concerning the company (notices and minutes
of annual general
meetings; records in respect of its directors, the securities
register and annual financial statements from 2007
until 2012) be
made available to him, that the company or the second respondent be
ordered to convene a meeting of shareholders
as provided for in s 61
of the Companies Act 71 of 2008 (“the Act”) and for the
award of punitive costs against the
respondents. The respondents
oppose the application essentially on the basis of a challenge to the
applicant’s title as shareholder
or right to be a holder of
shares in the company.
[2]
It is necessary at the outset to refer to the salient background
facts. The applicant became a 13% shareholder in the company
(then
known as Desert Charm Trading 21 (Pty) Ltd) in terms of a sales of
shares agreement (the agreement), concluded on 10 May
2004, between
the second respondent, as seller, and the applicant and one Botha as
purchasers, of the second respondent’s
44% shareholding in the
company for the purchase price of R1 250 000m payable in full on or
before 30 March 2007. The agreement
further provides for the
applicant and Botha becoming entitled upon signature of the
agreement, to transfer of 13% each of the
second respondent’s
shareholding and to give effect hereto they agreed to negative loan
accounts being created for the purchase
price of that portion of the
shareholding. Of relevance for present purposes are four suspensive
conditions enumerated in clause
5 of the agreement. The agreement
provides that upon the fulfilment of the suspensive conditions the
applicant and Botha would
become entitled to the balance of the
second respondent’s shares, then being 9% each. The respondents
boldly contend that
the suspensive conditions were not fulfilled and
that the agreement therefore did not come into existence resulting in
the share
certificate issued to and held by the applicant being of no
force and effect. On the same date a shareholders agreement was
concluded
between the second respondent, the applicant and Botha. In
terms of this agreement the share capital of the company was
allocated
as follows: 62% to the second respondent, 13% to the
applicant, 13% to Botha and 12% to a Worker’s Trust which was
to be
established. The applicant’s 13% shareholding was
subsequently transferred to him and a share certificate issued. It is
common
cause that the remaining 9% of the shares has not been
transferred to the applicant.
[3]
The applicant’s right to the applicant’s shareholding is
attacked by the respondents on the grounds, firstly that
that the
suspensive conditions of the agreement have not been fulfilled, and,
secondly, that the applicant has not alleged full
payment of the
purchase price of the shares on or before or on due date. Counsel for
the applicant with reliance on Watt v Sea
Plant Products Ltd &
others
1999 (4) SA 443
(C) and Bank Windhoek Bpk v Rajie en ‘n
ander
1994 (1) SA 115
(A) 141C-E, submitted that it was not open to
the respondents to challenge the applicant’s share certificate
in respect of
the 13% shareholding as those shares had duly been
transferred. According to the provisions of s 94 of the previous
Companies Act
61 of 1973, a certificate signed by two directors of a
company specifying any shares of that company held by any member,
shall
be prima facie evidence of the title of the member to such
shares. The applicant, albeit in the replying affidavit, has gone to
great lengths to show that the suspensive conditions except for one
which on the respondent’s own version had fallen away
were
fulfilled. I am satisfied that the applicant has at least prima facie
shown that he is a 13% shareholder in the company. That
being so, and
primarily based on the issued share certificate the applicant, !
hold, is entitled to the documents required in terms
of the relevant
subsections of s 26 (1) of the Act. It follows that the applicant is
entitled to relief he seeks.
[4]
It remains to deal with the costs of this application. Counsel for
the applicant asked for a punitive costs order. As justification
for
such an order counsel referred to the earlier refusals by the
respondents to comply with requests by the applicant to deliver
the
documents to him. Counsel further pointed to the second respondent’s
bald denial of fulfilment of the suspensive conditions
in the
answering affidavit which was effectively controverted by the
applicant in his replying affidavit for the submission that
the
second respondent in fact was mala fide. This aspect indeed caused me
concern. I have however decided to adopt a holistic approach
to the
matter which brings the following factors to the fore: The applicant
for reasons unexplained did not refer to or attach
the sale of shares
agreement to the founding papers. The second respondent did so and as
I have mentioned, baldly denied fulfilment
of the suspensive
conditions which in turn was refuted by the applicant. This of course
occurred in the replying affidavit with
the normal ensuing
restriction of filing a reply thereto. But, another disturbing aspect
needs to be mentioned: the applicant indeed,
as stated by the
respondents, has not made any mention of payment in respect of the
remaining shares on or before due date, or
at all. The applicant has
moreover not asked for a declarator concerning his shareholding.
Counsel for the respondents, not surprisingly,
informed me that this
is not the end of the matter: the second respondent intends in
further litigation to challenge the applicant’s
right and title
to shareholding in the company. From all this it appears that not all
the facts of this matter are before me. I
am accordingly not inclined
to order costs without the advantage of a consideration of all the
facts. I have therefore decided
to order costs to be costs in the
proposed litigation failing such that the second respondent pays the
costs.
[5]
In the result 1 make the following order:
1.
The first and/or second respondents are ordered within 15 days of the
date of this order to provide the applicant with the following
documents of the first respondent:
1.1
The notices and minutes of annual meetings; and
1.2
The records in respect of the first respondent’s directors as
referred to in section 24(3)(b) of the Companies Act, Nr
71 of 2008
(‘the Act”); and
1.3
The securities register of the first respondent; and
1.4
The annual financial statements of the first respondent for each
financial year from 2007 until 2012, as required by the Act.
2.
The first and/or second respondent are ordered to convene a meeting
of shareholders as provided for in section 61(1) of the Act,
within
15 days of the date of this order.
3.
The costs of this application shall be costs in the proposed action
to be instituted by the second respondent within 30 days
of the date
of this order, failing which the second respondent shall pay such
costs.
F.H.D
VAN OOSTEN JUDGE OF THE HIGH COURT
COUNSEL
FOR APPLICANT: ADV MMW VAN ZYL SC
APPLICANT’S
ATTORNEYS: DAWIE BEYERS ATTORNEYS INC
COUNSEL
FOR RESPONDENTS: ADV PI OOSTHUIZEN
RESPONDENTS’
ATTORNEYS: S ROUX INC
DATE
OF HEARING: 6 AUGUST 2013
DATE
OF JUDGMENT: 15 AUGUST 2013