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[2011] ZAFSHC 73
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Mokoena NO and Others v Bopa-Lesedi Development (Pty) Ltd (6202/2010) [2011] ZAFSHC 73 (5 May 2011)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 6202/2010
In the matter between:-
NOLILI PATRICIA
LINDIWE MOKOENA N.O.
….............
First
Applicant
NGANGELIZWE JACK
SIZANE N.O.
…......................
Second
Applicant
NOLILI PATRICIA
LINDIWE MOKOENA
…....................
Third
Applicant
and
BOPA-LESEDI
DEVELOPMENT (PTY) LTD
…...................
Respondent
_____________________________________________________
HEARD ON:
14 APRIL 2011
_____________________________________________________
JUDGMENT BY:
VAN DER MERWE, J
_____________________________________________________
DELIVERED ON:
5 MAY 2011
_____________________________________________________
[1]
This is an application for provisional liquidation of the respondent
company on the ground that it is just and equitable to
do so in terms
of section 344(h) of the Companies Act, No. 61 of 1973.
[2]
The respondent is part of a number of companies described as the
Bopa-Lesedi Group. It is not necessary to go into the particulars
of
the other companies. The business of the respondent is derived
mainly, if not exclusively, from contracts entered into with
the Free
State Provincial Government. It follows that its black economic
empowerment (“BEE”) status is of critical
importance to
the respondent. Thirty percent of the shares in the respondent are
held by the Ngangelizwe trust. The trustees of
the Ngangelizwe trust
are the first and second applicants herein. The third applicant is
the first applicant in personal capacity.
The other seventy percent
of the shares in the respondent are held by the Bopa-Lesedi trust.
The trustees of this trust are Mr.
Johan Hamer, Ms Anneke Kruger, Mr.
J.D. Bruwer and the third applicant. When the application was
launched, the respondent had two
directors, namely the third
applicant and Ms Anneke Kruger, with the third applicant as the
managing director.
[3]
As is evident from what is stated above, the application is brought
by the minority shareholder in the respondent as well as
the managing
director thereof. The application is opposed in the name of the
respondent by proper formal majority resolution of
the trustees of
the Bopa-Lesedi trust, that is the majority shareholder in the
respondent. On behalf of the applicants it is argued
that this is not
a resolution to oppose the application by the respondent itself.
However, I see no reason why the application
could not in these
circumstances, as of right, be opposed in the name of the company by
the holder of the seventy percent shareholding
in respondent company.
To hold otherwise would uphold meaningless technicality and would be
contrary to the letter and spirit of
section 34 of the Constitution.
[4]
As was often stated before, section 344(h) does not postulate facts
but only a broad conclusion of law, justice and equity,
as a ground
for winding up. Although not constituting a
numerus clausus
,
the courts have over the years developed categories of cases falling
within the ambit of section 344(h). These categories include
the
so-called deadlock principle.
[5]
In argument before me the ground for the application was confined to
this deadlock principle. However, an actual deadlock over
a
particular issue is not
per
se
a
ground for liquidation nor is it an essential requirement. This
principle is founded on the analogy of partnership and is strictly
confined to those small domestic companies in which, because of some
arrangement, express, tacit or implied, there exists between
the
members in regard to the company’s affairs a particular
personal relationship of confidence and trust similar to that
existing between partners in regard to the partnership business. If
by conduct which is either wrongful or not as contemplated
by the
arrangement, one or more of the members destroys that relationship,
the other member or members are entitled to claim that
it is just and
equitable that the company should be wound up. It follows that an
applicant who relies on this principle for a liquidation
order, must
not have been wrongfully responsible for the situation which has
arisen and in my judgment must show that. Compare
MOOSA,
NO v MAVJEE BHAWAN (PTY) LTD AND ANOTHER
1967 (3) SA 131
(T)
at 137 – 138;
EMPHY AND ANOTHER v PACER PROPERTIES (PTY)
LTD
1979 (3) SA 363
(D) at 366 H – 367 C and 368 H;
APCO AFRICA (PTY) LTD AND ANOTHER v APCO WORLDWIDE INC
2008 (5) 615 SCA at 623 – 625 para [16] – [21].
[6] I am satisfied that
the respondent is a company of the type described above and that such
relationship of trust and confidence
between the third applicant and
the other trustees of the Bopa-Lesedi trust was intended.
This
point was not seriously contested in argument before me.
The
third applicant became involved in the respondent on a fulltime basis
through the
Ngangelizwe
trust. The Ngangelizwe trust is regarded by all concerned as the
alter ego
of the
third applicant for this purpose. The close involvement of the third
applicant in the respondent is
inter
alia
demonstrated
by the fact that the Ngangelizwe trust is a thirty percent
beneficiary of the other shareholder of the respondent,
namely the
Bopa-Lesedi trust.
[7]
It is common cause that this relationship between the members of the
respondent has broken down irrevocably. What remains for
consideration therefore is whether this was caused by the wrongful
conduct of the third applicant.
[8]
During August 2010 the third applicant instructed Emex trust to do a
BEE audit of the Bopa-Lesedi Group, including the respondent.
Emex
trust does BEE verification and accreditation and therefore issues
certificates
inter
alia
used
to obtain government contracts. In applications for provisional
liquidation, factual findings may be made on a balance of
probabilities on the papers. It is in my view overwhelmingly probable
that the destruction of the relationship between the parties
resulted
from the instruction for the BEE audit given by the third applicant.
It was only when this became known on 7 September
2010 that the
Bopa-Lesedi trust commenced to attempt everything possible (and not
possible) to get rid of the third applicant.
The suggestion that the
decisive moment in this regard was when it was ascertained on 10
September 2010 that the third applicant
had lied about the condition
of her health, is seriously unconvincing. I find on a balance of
probabilities that the destruction
of the relationship of trust and
confidence between the members of the respondent, was caused by the
instruction for the BEE audit
given by the third applicant.
[9]
The third applicant says that she acted within her rights when she
did so, whereas the Bopa-Lesedi trust says that the third
applicant
acted in bad faith and in order to prejudice the respondent. There is
therefore a conflict of fact on the papers as to
the question of
whether the third applicant acted wrongfully when she gave
instructions for the BEE audit which caused the breakdown
of
relationships. This conflict cannot be decided on the probabilities
on the papers. The probabilities are in my view more or
less evenly
balanced. Moreover, this is a dispute within a narrow compass that
can be expeditiously disposed of. In all the circumstances
this is
one of those relatively rare cases where the dispute that I have
mentioned should be referred for the hearing of oral evidence.
This
hearing need not necessarily be before me.
[10]
In the result the following orders are issued:
1.
The matter is referred for the hearing of oral evidence at a time to
be arranged with the registrar of this court on the question
whether
the third applicant acted wrongfully when she instructed Emex trust
to conduct a BEE audit of the Bopa-Lesedi Group and
the respondent.
2.
The evidence to be adduced at the aforesaid hearing shall be that of
any witnesses whom the parties or either of them may elect
to call,
subject however to what is provided below.
3.
Save in the case of any persons who have already deposed to
affidavits in these proceedings, neither party shall be entitled
to
call any person as a witness unless:
3.1
it has served on the other party, at least 15 days before the date
appointed for the hearing, a statement by such person wherein
the
evidence to be given in chief by such person is set out; or
3.2
the court, at the hearing, permits such person to be called despite
the fact that no statement has been so served in respect
of his or
her evidence.
4.
Either party may subpoena any person to give evidence at the hearing,
whether such person has consented to furnish a statement
or not.
5.
The fact that the party has served a statement or has subpoenaed a
witness shall not oblige such party to call the witness concerned.
6.
Within 30 days of the making of this order, each of the parties shall
make discovery, on oath, of all documents relating to the
issue
referred to above, which documents are, or have at any time been, in
possession of or under control of such party.
7.
Such discovery shall be made in accordance with Rule 35 of the
Uniform Rules of Court and the provisions of that Rule with regard
to
the inspection and production of documents discovered shall be
operative.
8.
The incidence of the costs incurred up to now, shall be determined
after the hearing of oral evidence.
________________________
C.H.G. VAN DER MERWE,
J
On behalf of the
applicants: Adv. H.J. Benade
Instructed by:
Ramothello Raynard &
Tsotetsi Inc.
BLOEMFONTEIN
On behalf of the
respondent: Adv. P. Zietsman SC
With him:
Adv. N. Snellenburg
Instructed by:
Honey Attorneys
BLOEMFONTEIN
/sp