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[2012] ZAGPPHC 105
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Thompson and Another v ILIPS (Pty) Ltd and Others (27199/12) [2012] ZAGPPHC 105 (1 June 2012)
NOT
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC OF SOUTH AFRICA)
CASENO:
27199/12
DATE:
1 June 2012
IN
THE MATTER BETWEEN:
C
THOMPSON
.............................................................................................
FIRST APPLICANT
COUPLES
INVESTMENTS
CC
.................................................................
SECOND
APPLICANT
and
ILIPS
(PTY)
LTD
.....................................................................................
..
FIRST RESPONDENT
SHANE
THOMPSON
..............................................................................
SECOND
RESPONDENT
SEBOPHILE
VENTER
MOLAPO
..........................................................
THIRD
RESPONDENT
NARDUS
TRUTER
...................................................................................
FOURTH
RESPONDENT
SHANE
THOMPSON
N.O
.......................................................................
FIFTH
RESPONDENT
JUDGMENT
LEDWABA,
J
INTRODUCTION
[1]
The applicants filed an urgent application against five respondents
who are opposing the application. The application consists
of 321
pages.
[2]
The undermentioned summary of the facts are, in my view, important
for the understanding of the decision to be made herein.
2.1
The first applicant (Catherine) is the sole member of the 2nd
applicant (Couples) which has forty (40%) shares in the 1st
respondent
(MPS).
2.2
The 2nd respondent (Shane) is the sole trustee of Mispah Trust (5th
respondent) which Shane is sued in his representing capacity
as the
trustee of the trust. After hundred (100) shares of the MPS were
issued on the 16 April 2009, Mispah owned thirty five (35)
shares in
MPS.
2.3
The 3rd respondent (Venter) owned twenty five (25) shares in MPS.
2.4
At the outset it should be mentioned that Catherine and Shane are
married to each other and they are now involved in an acrimonious
divorce proceedings which commenced in 2011.
2.5
It is common cause that in 2009 Mispah disposed of eleven (11) shares
from its 35 shares and transferred them as follows:
five
(5) shares to Mr APJ Smit
five
(5) shares to HJ Schlebusch
one
(1) share to Venter.
COMMENTS
[3]
Catherine, acting on behalf of Couples, in February 2012 discovered
that shares where transferred contrary to the shareholders
agreement
of MPS and that the pre-emptive rights of Couples were infringed. The
applicants challenged the said transfer of the
share. The other
reason for the challenge was that Couples was not notified of the
said transfers.
[4]
It is further common cause that further various transfers of shares
in MPS took place among Mispah, Venter and one MA Mahlalela.
I do not
think it is necessary to go into the details regarding said transfer
because the applicants claim is based on the initial
transfer of
eleven (11) shares to Venter, Smit and Schlebush.
[5]
Importantly. Mispah represented by Shane conceded that the transfer
of the eleven (11) shares was irregular and a restitution
of the said
shares took place, (see annexure CT 15 letter from Mispah attorneys
dated 28 February 2012).
[6]
Shane in paragraph 5.17 of the answering affidavit on page 208 of the
paginated papers said the following: "The share register
was
rectified during or about April 2012 and accordingly the shareholding
of MPS has been restored to reflect the shareholders,
as those who
signed the shareholders agreement on 14 April 2009."
[7]
The shareholders agreement made and entered into by and between MPS,
Couples, Mispah and Venter in April 2009 clause 11.2.1
- 11.2.2 reads
as follows:
"7.1
When a shareholder ("the OFFEROR") Intends to dispose of
any of his shareholding in the COMPANY, the OFFEROR
shall offer the
shares ("the OFFER SHARES") in writing to the other
shareholders ("the OFFEREE SHAREHOLDERS"),
stating the
price and the terms of payment required by it and if it intends
selling to a particular third party ("the THIRD
PARTY") it
shall disclose the name of the THIRD PARTY.
7.2
If, within 30 (THIRTY) days after the receipt of the offer ("the
OFFER") (during which period the offer shall be irrevocable),
it
is not accepted in writing in respect of all the OFFER SHARES, by any
of the OFFEREE SHAREHOLDERS, if more than one, proportionately
to
their shareholdings, or in proportions agreed amongst them, the
OFFEROR may, within a further 30 (THIRTY) days dispose of the
OFFER
SHARES (but not fewer) to the THIRD PARTY only, at a price not lower
and on terms not more favourable to such person than
the price and
terms at and on which the OFFEREE SHAREHOLDERS were entitled to
purchase them and on condition that the OFFEREE SHAREHOLDERS
have
consented in writing to the disposal of the OFFER SHARES (on the
basis set out above) to the THIRD PARTY which consent each
of the
OFFEREE SHAREHOLDERS undertakes shall not be unreasonably withheld."
[8]
The Applicants' counsel Adv AB Rossouw SC argued that Couples is
entitled to claim transfer of the 11 shares on the same terms
and
conditions that the said shares were disposed of.
[9]
The respondent's counsel Adv J Josephson could not argue to the
contrary regarding the legal position and he only submitted
that the
applicants were aware of the transaction and further said the
application should be dismissed because the applicants should
have
foreseen the disputes of facts and they should not have approached
the court on motion proceedings.
[10]
In my view, on a careful analysis of the facts of this case alleged
the dispute of facts raised in casu is not of such a nature
that this
matter cannot be decided on the affidavits especially having regard
to certain concessions made by the respondents.
[11]
The respondents', in particular Shane, allegation that Couple's
demand to purchase the eleven (11) shares would be prejudicial
to
ILIPS as the BEE status of ILIPS would be sacrificed is not, in my
view, a legal justification to refuse the order sought. The
BEE
status of ILIPS can always be rectified.
[12]
The legal position in matters involving infringements of pre-emptive
rights is that if a seller concludes a contract of sale
or transfer
of shares with a third party contrary to the pre - emptive rights
agreement, the party whose rights have been infringed
can step into
the shoes of the third party by unilateral declaration of intent. A
contract of sale will then be deemed to have
been concluded between
the seller and the holder of the pre emptive rights. See Associated
South Bakeries (Pty) Ltd v Oryx &
Vereinigte Backereien (Pty) Ltd
en andere
1982 (3) SA 893(A)
at 907 D-G.
[13]
The applicants further based this application on the fact that the
meeting of the 7th of May 2012 where the respondents dealt
with the
issue of compelling Couples to agree to the value of shares was
irregular and the decision taken at such meeting was also
irregular
in that clause 12.2.2.2 which reads as follows: "... within 5
(FIVE) days after learning of the occurrence of any
event
contemplated in clause 12.1.1 to 12.1.8, anyone member of the
OFFEREE, other than the OFFERING SHAREHOLDER, may, by notice
in
writing, compel the OFFERING SHAREHOLDER to offer his shares in the
COMPANY to the OFFEREE at a price being the fair value of
the shares
to be agreed among all SHARESHOULDERS (including the OFFERING
SHAREHOLDER) or, failing AGREEMENT, to be determined by
the auditors
of the COMPANY. Who shall act as experts and not as arbitrators,"
was not complied with in that the respondents
knew in February 2012
about the applicants attitude of refusing to sign documentation for
the FNB facility for financing ILIPS.
[14]
The respondent dismally failed to justify the non compliance.
APPOINTMENT OF THE
NEW
CEO
[15]
Shane stated in his affidavit that at the meeting held on 7 May 2012
the shareholders who were present discussed his resignation
as the
CEO and the appointment of the 4th respondent as the CEO of ILIPS.
[16]
Clause 19(1) of the shareholders agreement reads as follows:
"The
Managing Director/Chief Executive Officer ("managing director")
of the COMPANY shall be appointed, removed and
replaced by the
SHAREHOLDERS at a shareholders meeting."
[17]
Shane stated that because there was a quorum of 60% of the
shareholders and further that a round robin resolution was signed
by
Molapo and himself the appointment of Truter was in accordance with
clause 19 of the shareholders agreement.
[18]
There is no doubt that the appointment of the 4th respondent did not
result from a properly constituted meeting of the shareholders.
There
was no notice given to Couples regarding a meeting for the
appointment of the CEO. The failure to Couples cannot be regarded
as
accidental or inadvertent failure.
[19]
Importantly, Item 7(5) of Schedule 5 (Transitional Arrangements) of
the
Companies Act 71 of 2008
clearly stipulates that despite anything
contrary in a company's Memorandum of Incorporation the provisions of
the Act about the
meetings of shareholders and the adoption of
resolutions apply from the effective date of the act to every
existing company. The
effective date of the act is 1 May 2011.
[20]
Section 62(1)
of the Act stipulates that a company must deliver a
notice to all of the shareholders.
Section 62(3)
prescribes the
contents of the notice.
Section 62
(4) stipulates that if a company
fails to give the required notice of a shareholders meeting, the
meeting may proceed if all the
persons who are entitled to exercise
voting rights acknowledge actual receipt of the notice.
[21]
Section 62(6)
reads as follows: "And immaterial defect in the
form or manner of giving notice of a shareholders meeting, or an
accidental
or inadvertent failure in the delivery of the notice to
any particular shareholder to whom it was addressed, does not
invalidate
any action taken at the meeting."
[22]
Mispah and Venter according to the papers, are in the process to
enforce the forced sale. The shares of Couples are at a great
risk. I
find that the matter is urgent.
[23]
I therefore make the following order:
27.1The
normal forms and service are dispensed with and the matter is
regarded as urgent.
27.2
The second, third and fifth respondents are interdicted from selling
the shares of the second applicant as decided at a meeting
held on
the 7th of May 2012.
27.3
The first respondent must rectify and enter in its securities
register to reflect the registration of additional 11 (eleven)
shares
to the shares of the second applicant which shares should be deducted
from the shares of Mispah Trust.
27.4
The first respondent must issue a certificate to the second applicant
in terms of
section 51
(1) of the
Companies Act 71 of 2008
reflecting
that the second applicant holds 51 (Fifty one) shares in the first
respondent.
27.5
The appointment of the fourth respondent as the Chief Executive
Officer or Managing Director is declared invalid and is hereby
set
aside.
27.6
The second, third, fourth and fifth respondents are ordered to pay
the costs of the first and second applicants jointly and
severally
which costs includes the employment of a Senior Counsel.
AP
LEDWABA
JUDGE
OF THE HIGH COURT
HEARD
ON: 30 May 2012
FOR
THE APPELLANT: Adv A B Rossouw SC
INSTRUCTED
BY: Jaco Roos Attorneys, Pretoria
FOR
THE RESPONDENT: Adv J Josephson
INSTRUCTED
BY: Botha and De Klerk attorneys, Pretoria