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[2011] ZANCHC 32
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Du Toit v Joodt and Others (458/2011) [2011] ZANCHC 32 (11 November 2011)
11
IN THE HIGH COURT OF
SOUTH AFRICA
(NORTHERN CAPE HIGH
COURT, KIMBERLEY)
Case
No: 458/2011
Heard
on: 12/08/2011
Delivered
on: 11/11/2011
In
the matter between
JACOB
CASPER KRUGER DU TOIT
…....................................
Applicant
And
RUBEN
JOODT
…..........................................................
First
respondent
SAAMWERK
SOUTWERKE (PTY) LTD
…...............
Second
respondent
KALKPOORT
SOUTWERKE CC
…..............................
Third
respondent
______________________________________________________
JUDGMENT
______________________________________________________
PAKATI
AJ
On 17 March 2011 my
sister, Hughes-Madondo AJ, issued the following interim order:
“
1.
Dat
ń
Bevel
Nisi toegestaan word wat die Respondente of enige belanghebbende
party, aanse om op 27 Mei 2011, om 10h00 of so spoedig moontlik
daarna as wat die saak aangehoor mag word, redes, indien enige, aan
te voer waarom die volgende bevel nie gemaak moet word nie:
Dat Eerste
Respondent verbied word om enige direkte of indirekte stappe
(uitgesluit enige regsstappe) te neem wat ten doel het
of die effek
(direk of indirek) het om die Tweede en Derde Respondente se
besigheid te benadeel of hul besigheidsreputasie
te skend of ten
doel het om die Applikant se naam of reputasie te skend.
Dat Eerste
Respondent verbied word om enige mededelings of bewerings of
verklarings oor die Tweede en Derde Respondente te maak
aan enige
derde party of die Departement van Minerale Bronne wat ten doel het
of die effek het (op
ń
direkte of indirekte wyse) om die
Tweede en Derde Respondente se besigheid te benadeel of hul
besigheidsreputasie te skend of
oor Applikant wat ten doel het of
die effek het (op
ń
direkte of indirekte wyse) om die
Applikant skade te berokken of sy naam en reputasie te skend.
Dat Eerste Rspondent
verbied word om enige werknemer, direkteur of lid van Tweede
Respondent en enige lid of werknemer van Derde
Respondent te
dreig,te intimideer, te beledig of op
ń
direkte of indirekte wyse te
verhinder om hulle werk en/of daaglikse take te verrig.
Dat Eerste Respondent
die koste van die aansoek betaal.
Dat hierdie bevel
tesame met afskrifte van die aansoekstukke so spoedig moontlik op
die Respondent beteken word.
Dat paragrawe 1.1,
1.2 en 1.3 sal dien as
ń
tussentydse interdik wat onmiddelik
van krag is.”
2. Mr Du Toit and the
first respondent, Mr Reuben Roodt, are directors of the second
respondent, Saamwerk Soutwerke (Pty) Ltd (“Saamwerk
Ltd”).
It is common cause that Roodt owns 12% of the shares in the company
and holds 26% interest in the third respondent,
Kalkpoort Soutwerk CC
(“Kalkpoort CC”). Du Toit is the majority shareholder of
Saamwerk Ltd holding 38% of the shares.
12% of the shares in Saamwerk
are unallocated. Roodt owes 25% of the member’s interest. Mr Du
Toit is a majority member in
Kalkpoort CC and holds 74% of members’
interest. He, as a majority shareholder, has a financial interest in
Saamwerk Ltd
and Kalkpoort CC. Both Du Toit and Roodt are employees
of Kalkpoort CC. Saamwerk Ltd has a management team that operates its
daily
activities.
3. Du Toit has been
involved with mining and processing of salt for many years. In 1999
he established Kalkpoort CC and in 2005
Saamwerk Ltd. The nature of
business of both entities is the production, supplying as well as
mining and processing of salt. Saamwerk
Ltd is in possession of
mining rights of salt in respect of the plant called Eenzaamheid. The
Department of Minerals and Resources
(“the Department”)
also approved an application for mining of salt in respect of the
plant known as Vrysoutpan.
4. On 17 May 2006 an
Association Agreement to regulate their relationship was signed by
both parties. Since Roodt is not an employee
of Saamwerk Ltd he does
not have much influence on its operations. Saamwerk Ltd has six
employees and Kalkpoort CC has a workforce
of 124. These employees
and their families depend on these business entities operating as
going concerns for their livelihood and
wellbeing.
5. Roodt’s duties
in Kalkpoort CC were extended to supervise the running of the engines
and making sure that they were fitted
with safety plates and fan
belts and that the fire extinguishers were properly and strategically
located. The employees had to
wear safety plates on their heads and
safety masks over their faces. According to Du Toit problems started
in 2007 when Roodt failed
or was negligent in carrying out these
occupational safety and health duties. Their relationship became sour
as a result. On 07
June 2007 he offered to sell his interest in
Kalkpoort CC to Roodt who never came back to him about it until 07
August 2007. In
the meantime Du Toit received numerous complaints
from the employees of Kalkpoort CC regarding the conduct of Roodt. He
received
information that Roodt had an argument with one Mr David
Senye and attempted to stab him with a knife. In another incident he
shouted
at Mr P Meyer, the financial manager of Kalkpoort CC, and
poked a finger in his face on 28 November 2008.
6. Du Toit states that in
2008 Roodt discussed the problems relating to the employees of
Kalkpoort CC with Mr Stuurman, attached
to a non-governmental
organization, without consulting him. Further that Roodt absented
himself from work without leave or prior
arrangement and abused
alcohol during working hours. In a meeting held by the parties and
their employees Roodt intimated that
the employees of Kalkpoort CC
and Du Toit were disrespectful towards him and that he was misused as
a black empowerment partner,
which is denied by Du Toit.
7. Du Toit alleges that
within a week of Roodt assuming duties the working conditions became
unbearable and unstable for the stated
reasons. It was difficult to
draw clients to their businesses because of Roodt’s conduct. He
failed to supply Du Toit with
his statement of creditworthiness when
asked for it. Du Toit intimated that Roodt had a bad credit record
which explained why he
could not obtain financial assistance from
Absa bank when they needed it. A disciplinary hearing against him was
scheduled for
29 April 2008 but he did not turn up. At one stage this
matter was referred to the Commission for Mediation, Conciliation and
Arbitration
(CCMA) to resolve the issues. However, before the CCMA
could take any decision Roodt and Du Toit resolved their differences
in
the interest of Kalkpoort CC.
8. A routine inspection
was conducted by members of the Department on 25 November 2008 on the
premises of Kalkpoort CC whereupon
Roodt raised a complaint with
their officials about the profit sharing policy of Kalkpoort CC. He
did so without the knowledge
of Du Toit. These allegations were not
disputed by Roodt.
9. In 2009 Roodt and Du
Toit signed a new Association Agreement wherein they agreed that a
more trustworthy relationship will be
maintained between them.
10. On 13 August 2010 one
Mr Desmond Maganga, from Siyanda District Municipality in the
Department of Economic Development and Tourism,
addressed the
directors of Saamwerk Ltd. It transpired that the purpose of his
visit was really to gather information concerning
the social and
labour policies of Saamwerk Ltd as well as the black empowerment
profile and the clientele. This was strange to
Du Toit. He confronted
Maganga who informed him that he was there on the instructions of
Roodt and Mr John Block, a director of
a company called South African
Salt Works (Pty) Ltd, a competitor in the same trade. This, according
to Du Toit, was aimed at sabotaging
the businesses of Saamwerk Ltd
and Kalkpoort CC.
11. During November to
December 2010 Du Toit discovered through his investigations that
Roodt’s wife Ms Patsy Roodt, an employee
of Kalkpoort CC, was
misappropriating funds. As a result of this she was suspended with
full pay on 04 January 2011. During an
enquiry into Ms Roodt’s
conduct on 31 January 2011 Mr Roodt got angry and pointed a
threatening finger at Mr Jacobus Hendricksz
and Mr Harry Van Zyl,
employees of Kalkpoort CC. He threatened and intimidated them with
violence and said: “...
you will see what will happen to
Kalkpoort...,
” referring to Kalkpoort CC.
12. In a meeting held
between Roodt, Hendricksz, Du Toit and Du Toit’s two sons
Jacques and Burger, Roodt offered to sell
his shares for R2million.
Du Toit refused and told him that he had not paid his contribution
for his shares and cannot therefore
put up those shares for
R2million. Roodt became angry and broke the tape recorder with which
the minutes were recorded and said:
“
You boers will sit on
the street because I am going to lock the doors of Kalkpoort”
.
He then left the room. He never came to work since then. No binding
decisions could be taken due to his unavailability.
13. Du Toit says that a
letter was shown to Hendricksz which Block forwarded to the
Department wherein he referred to problems that
Roodt allegedly
experienced. This, to him, clearly showed that Roodt’s motive
was to destroy Saamwerk Ltd. According to Du
Toit the conduct
displayed by Roodt damaged the good name and reputation of Saamwerk
Ltd and Kalkpoort CC.
14. To the contrary Roodt
contends that the initial agreement was that he and Du Toit had to
continue as directors of Kalkpoort
CC. He was the Human Resource
Officer whilst Du Toit supervised the mine. As a majority
shareholder, Du Toit made all the decisions
with his sons and he was
only informed of the decisions already taken.
15.Roodt contends further
that early this year he proposed to sell his interest to Du Toit’s
sons for R2 million because he
recuperated at home after he was
involved in a car accident. Du Toit’s sons counter-offered to
buy his interest for R1 5000
000-00. He was not satisfied as a result
of which and the sale did not materialise. The meeting was adjourned
to a later date.
16. According to Roodt
Saamwerk Ltd was not operating legally. He disputes that he is
harming the good name and reputation of the
businesses. He avers that
Du Toit used him as a Black Empowerment Employee member and wanted to
leave him with nothing. He states
that Du Toit was not affected by
the alleged intimidation.
17. Mr Tredoux for Du
Toit argued that there is sufficient objective evidence to grant the
final interdict. He argued further that
there is no defence put
forward by Roodt (the first respondent) and that material allegations
have not been disputed by him.
18. Mr Phiri for Roodt
contended that the Association Agreement attached to the founding
affidavit was not signed and that Du Toit
relied on hearsay by the
employees of Kalkpoort CC and that no criminal charges were laid
against Roodt for the alleged disruptive
conduct. He added that the
dispute concerned the purchase and sale of Roodt’s interest in
Kalkpoort CC. He submitted that
Du Toit contradicted himself by
saying he was not entitled to a dividend whereas he still had not
paid for his shares. Mr Phiri
contended that Du Toit failed to show
how the good name and reputation of the businesses were damaged and
that there was no reason
for Roodt to act so destructively.
19. In his answering
affidavit Roodt failed to respond to material allegations made by Du
Toit in his founding affidavit. A respondent’s
answering
affidavit is required to deal pertinently with the allegations
contained in an applicant’s founding affidavit.
If a respondent
fails to admit or deny, or confess and avoid, allegations in the
applicant’s affidavit the Court will, for
the purposes of the
application, accept the applicant’s allegations as correct. See
PLASCON-EVANS PAINTS LTD v VAN RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3)
SA 623
(A)
at 634.
20. Both Du Toit and
Roodt, as directors of the company, have to exercise their powers and
carry out their duties
bona fide
and for the benefit of the
company. Apart from the duties imposed on a director in terms of the
Act, 61 of 1973 (now repealed by
Act 71 of 2008), a director is at
common law subject to fiduciary duty requiring him to exercise his
powers
bona fide
and for the benefit of the company and to
display reasonable care and skill in carrying out his office. He
cannot be relieved of
this duty through the articles of association
or in a contract or in any other way. Any act amounting to an evasion
of this duty
is seen as a breach of the duty itself. See
CILLIERS
& BENADE CORPORATE LAW 3
RD
EDITION
Page139-140
. See also
HOWARD V HERRIGEL AND ANOTHER NNO
[1991] ZASCA 7
;
1991
(2) SA 660
(A)
678A-B.
21. The overwhelming
evidence shows that Roodt was busy destroying the good name and
reputation of Saamwerk Ltd and Kalkpoort CC.
He breached his duty as
a director. Section 42 and 43 of the Close Corporation Act, 69 of
1984, provide as follows:
“
42
FIDUCIARY POSITION OF MEMBERS
Each
member of a corporation shall stand in a fiduciary relationship to
the corporation.
Without
prejudice to the generality of the expression ‘fiduciary
relationship’, the provisions of subsection (1) imply
that a
member-
Shall
in relation to the corporation act honestly and in good faith, in
particular-
Shall
exercise powers as he or she may have to manage or represent the
corporation in the interest and for the benefit of the
corporation;
and;
shall
not act without or exceed the powers aforesaid; and
shall avoid any
material conflict between his or her own interests and those of the
corporation, ...
43 LIABILITY OF
MEMBERS FOR NEGLIGENCE
A member of a
corporation shall be liable to the corporation for loss caused by
his or her failure in the carrying on of the business
of the
corporation to act with the degree of care and skill that may
reasonably be expected from a person of his or her knowledge
and
experience.”
22. If the company cannot
or will not act against those who wronged it, a derivative action on
behalf of the company may be instituted
in certain circumstances.
Such action will have to be instituted against the wrongdoers by
someone acting on behalf of himself
and all the shareholders other
than the wrongdoers. See
CILLIERS & BENADE
supra
at
p 302-303. Section 49 of the Close Corporations Act provides as
follows:
“
49
UNFAIRLY PREJUDICIAL CONDUCT
Any member of a
corporation who alleges that any particular act or omission of the
corporation or of one or more other members
is unfairly prejudicial,
unjust or inequitable to him or her, to some members including him
or her, or that the affairs of the
corporation are being conducted
in a manner unfairly prejudicial, unjust or inequitable to him or
her, or to some members including
him or her, may make an
application to a Court for an order under this section.”
Section 50 provides:
“
50
PROCEEDINGS AGAINST FELLOW-MEMBERS ON BEHALF OF CORPORATION
Where a member or a
former member of corporation is liable to the corporation
To make an initial
contribution or any additional contribution contemplated in
subsection (1) and (2) (a), respectively, of section
24; or
on
account of-
the breach of a duty
arising from his or her fiduciary relationship to the corporation in
terms of section 42; or
negligence
in terms of section 43,
any other member of
the corporation may institute proceedings in respect of any such
liability on behalf of the corporation against
such member or former
member after notifying all other members of the corporation of his or
her intention to do so.”
23. Roodt has shown no
interest in the prosperity of Saamwerk Ltd and Kalkpoort CC. He has
already indicated that he wished out
of the two businesses. The Act
allows Du Toit to institute a derivative action against Roodt based
on the fact that he is in breach
of an obligation pertaining to his
fiduciary duties towards the corporation. See
CLOSE CORORATION
SERVICE BY CILLIERS BENADE, OOSTHUIZEN, DE LA REY, issue 35 at 4-27.
24. In para D of his
heads of argument Mr Phiri argued as follows:
“
D.
Reasons why the rule nisi should not be made final.
It is submitted that
if this rule nisi is made final it would be of great consequence to
the first respondent and of less consequence
to the applicant due
[to] the following:
First Respondent will
not be allowed to come near the premises of Second and Third
respondents.
First Respondent will
not be able to participate in the day to day running of the
businesses of both second and third respondents.
First Respondent will
not be able to consult with [the] applicant in order for [the] first
respondent to sell his interests from
third respondent since [the]
applicant and first respondent are the only members.”
25. I am unable to uphold
the contention of Mr Phiri. Roodt acted in bad faith by consulting
outsiders and soliciting their help
to prejudice the businesses in
their good name and goodwill. Roodt has essentially made bare
denials. I am satisfied that the applicant,
Du Toit, has established
a proper case for a final interdict the requirements of which are
stated as follows in
SETLOGELO v SETLOGELO
1914 AD 221
at 227
:
“
...a
clear right, injury actually committed or reasonably apprehended, and
the absence of similar protection by any other ordinary
remedy.”
I therefore make the
following order.
The Rule Nisi issued
on 17 March 2011 is hereby confirmed and made final.
The First respondent,
Mr Ruben Roodt, is ordered to pay the taxed costs of this
application on a party and party scale.
_______________________
PAKATI AJ
NORTHERN CAPE HIGH
COURT
On
behalf of the Applicant
Adv.
JC Tredoux
On
behalf of the 1
st
Respondent
Mr.
A Phiri