Barnard v Carl Greaves Brokers (Pty) Ltd and Others, Carl Greaves Brokers (Pty) Ltd and Others v Barnard, Barnard v Bredenhann and Others (8021/2006 , 8263/2006 , 10622/2006) [2007] ZAWCHC 2; [2008] 2 All SA 272 (C); 2008 (3) SA 663 (C) (22 January 2007)

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[2007] ZAWCHC 2
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Barnard v Carl Greaves Brokers (Pty) Ltd and Others, Carl Greaves Brokers (Pty) Ltd and Others v Barnard, Barnard v Bredenhann and Others (8021/2006 , 8263/2006 , 10622/2006) [2007] ZAWCHC 2; [2008] 2 All SA 272 (C); 2008 (3) SA 663 (C) (22 January 2007)

Reportable
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
In the
matters between:
CASE
NO.8021/2006
JUAN
BARNARD
Applicant
and
CARL GREAVES BROKERS (PTY)
LTD
First
Respondent
CAREL EDWARD
GREAVES
Second
Respondent
DIRK CYRIL
KNAPP
Third
Respondent
CASE NO.8263/2006
CARL GREAVES BROKERS (PTY)
LTD
First
Applicant
CAREL EDWARD
GREAVES
Second
Applicant
DIRK CYRIL
KNAPP
Third
Applicant
and
JUAN
BARNARD
Respondent
CASE NO.10622/2006
JUAN
BARNARD
Applicant
and
PHILIP ALBERT
BREDENHANN
First
Respondent
CAREL EDWARD
GREAVES
Second
Respondent
DIRK CYRIL
KNAPP
Third
Respondent
THE INSURANCE BROKING SHOP (PTY)
LTD
Fourth
Respondent
CARL GREAVES BROKERS (PTY)
LTD
Fifth
Respondent
JUDGMENT
Delivered on 22 January 2007
BINNS-WARD
AJ
Introduction
[1]
Pursuant to a consolidation of proceedings for purposes of hearing,
four applications (one of which was a counter-application)
were
argued together before me.
[2]
The most important was an application by one Juan
Barnard (‘Barnard’) for the provisional winding up of
Carl Greaves
Brokers (Pty) Ltd (‘the company’).  By
an amendment to the notice of motion in that application, moved
during
argument, Barnard seeks, in the alternative, relief -
essentially of the sort contemplated in terms of s 252 of the
Companies
Act 61 of 1973 - in the form of an order directing Carel
Greaves (‘Greaves’) and Dirk Knapp (‘Knapp’)
[1]
to purchase his shares in the company.  The amendment was
inspired by the company’s counsel’s argument that on
any
approach, and assuming that Barnard had made out an entitlement to
relief as a shareholder, a winding up would be inappropriate
in the
context of the availability of more appropriate remedies under s 252
of the Companies Act.  The parties agree
that in the event of
relief being granted to Barnard in terms of that application the
other applications will become largely moot.
[3]
The second
and third applications were the principal and counter-applications,
respectively, in case no. 8263/06.  Both went
to the proper
meaning, or intended effect of an order made by Motala J in an
application previously brought by Barnard against
the company for a
mandament van spolie
restoring him to the possession of the company’s premises at
29 Douglas Carr Drive, Bellville.  The issue which
gave
rise to the second and third applications was the subsequent
relocation of the company’s offices to different premises.

Barnard contends that the ambit of Motala J’s order (which
was confirmed on appeal to the Full Bench in case no. A 894/05)

affords him the right of joint possession, together with Greaves and
Knapp, his ‘partners’
[2]
in the business of the company, of the new premises.  Barnard
sought to obtain access to the new premises with the assistance
of
the Sheriff and the police, purportedly under the authority of
Motala J’s order.  The company, Greaves and Knapp

brought an application seeking an amplification of Motala J’s
order to make it clear that it pertained only to the company’s

former place of business.  In the alternative, the applicants
sought orders interdicting Barnard from trying to obtain access
to
the new premises and preventing him from interfering in the sale of
the original premises.  Barnard brought a counter-application

for an order amending Motala J’s order to include
references to the new premises.
[4]
Possession
of the original premises of the company has also once again become an
issue in contention.  That is the subject
matter of the fourth
application.  The company
[3]
has sold the original premises to an attorney, one Bredenhann.
Transfer of the property has not yet been given, but Bredenhann
has
in the interim set up his offices and residence there.
Bredenhann is excluding Barnard from access to the premises.

Transfer of the property to Bredenhann is being delayed - in the
main, it would seem, because of the inability of the company to
give
vacant occupation in the context of the persistent attempts by
Barnard to exercise what he contends to be his right to joint

possession of the property.  The fourth application is a
spoliatory application by Barnard for restoration of possession of

the property now occupied by Bredenhann.
THE
WINDING UP APPLICATION
[5]
The ground
upon which Barnard contends that the company should be wound up is
that it would be just and equitable within the meaning
of s 344(h)
of the Companies Act 61 of 1973.  Applications for winding up on
this ground are usually brought by members
of the company.
[4]
Barnard has emphasised his status as a shareholder, but in terms of
s 346 of the Companies Act a member of a company
bringing an
application for its liquidation in terms of s 344 (h) must have
been a registered shareholder of the company for
a period of at least
six months before the institution of proceedings.  Barnard might
be the owner of shares in the company
(a matter in contention - about
which I shall have more to say later), but it is common cause that he
has never been registered
as a member.
[5]
[6]
Barnard also founds his legal standing to bring the application on
the basis that he is a creditor of the company.  Whether
it is
competent for a creditor, who is not able to prove that a company is
insolvent or unable to pay its debts, to obtain the
winding up of a
company on just and equitable grounds was fundamentally in issue
between the parties.
[7]
It is
necessary to describe the history of Barnard’s connection with
the company.  He and Knapp had originally been employees
of the
company, at a time when the issued shares in it were wholly owned by
Greaves.  In 1998, Barnard and Knapp had negotiated
an agreement
with Greaves in terms of which they would obtain a proprietary
interest in the company.  The resultant deed of
agreement,
entitled ‘Shareholders’ Agreement’, provided that
upon signature thereof by the parties Greaves would
sell to Barnard
25 of his shares in the company
[6]
for R125000 and 23 of his shares to Knapp, also for R125000.
Payment for the shares was to be effected to Greaves from the

dividends subsequently payable by the company to Barnard and Knapp,
qua shareholders.  Greaves was effectively granted a preferent

right to receipt of these dividends until the purchase price had been
redeemed.
[7]
The agreement provided further that notwithstanding the unequal
distribution of shares in the company between the three parties
to
the agreement, they would share equally in its distributed profits
and in the distributed proceeds of any sale of the company’s

business or assets.  The company, represented for that purpose
by Greaves, was itself also a party to the Shareholders’

Agreement.
[8]
The agreement stipulated that ‘the parties’ (presumably
meaning Greaves and the company) were obliged, within three
months of
the date of signature, to procure the transfer to the respective
purchasers of the shares sold by Greaves in terms thereof.
In
the circumstances it is plain that the sale of shares was a credit
sale.  The contract provided that Knapp and Barnard
were to
serve together with Greaves as the directors of the company in an
executive capacity.  Furthermore, directors’
meetings and
shareholders’ meetings would be quorate only if attended by all
three of them.  According to its tenor,
the terms of the
agreement were to prevail over any conflicting provisions in the
memorandum and articles of association of the
company.
[9]
The management of the company’s affairs thereafter proceeded in
accordance with the provisions of the agreement.
The agreement
unambiguously expresses the parties’ common intention that all
three of the shareholders were to be directly
involved in the
operation of the business on an essentially equal basis, subject only
to Greaves having the deciding say when ‘consensus’
could
not be reached between the three executive directors.
[10]
One may
accept that some form of constructive delivery of the shares took
place by the seller to the purchaser.  This is evident
from the
subsequent conduct of the parties and from the seller’s demand
for payment from Barnard, about which I shall I have
more to say
later.
[8]
Neither Barnard nor Knapp obtained registration of their ownership of
shares in the company as contemplated in the agreement.
Shares
are ordinarily transferred by seller to purchaser by the delivery to
the purchaser of an appropriate transfer form completed
by the
registered holder of the shares so as to enable the purchaser to
require the company to amend its register of members accordingly.

Notwithstanding advice that Greaves has apparently obtained to the
contrary, I consider, however, that the purchasers were entitled
in
the peculiar circumstances of the present case, to require the
company, by virtue its privity to the contract, to amend its
members’
register within three months of the conclusion of the agreement to
afford recognition to their acquisition of the
shares without the
necessity of tendering a share transfer form.
[11]
It was also agreed that no further shares in the
company could be issued other than by way of a pro rata rights offer
to existing
shareholders, unless otherwise agreed to in writing by
the parties to the agreement.  A contractual framework was
established
in terms of which the shares in the company would remain
in the ownership of either Greaves or his daughter, Elizabeth, and
Knapp
and Barnard in the event of the death, mental illness or
insolvency of any of the parties to the agreement.  The contract
provided that the shareholder parties to the agreement owed each
other a duty of good faith and expressly characterised their
relationship
as that of ‘quasi partners’.
[9]
[12]
In the circumstances I accept that Barnard has acquired effective
ownership of the shares in the company sold to him by Greaves.
[13]
The shareholders bound themselves in terms of the agreement to stand
jointly as sureties for the company in favour of any third
party to
the extent that might be necessary from time to time to enable the
company to conduct its business.  Barnard annexed
to his
founding affidavit a deed of suretyship executed by himself, Greaves
and Knapp, jointly and severally, on 22 March
2003, in favour of
First Rand Bank Limited, trading as Wesbank, in an unlimited amount
in respect of any debts which the company
might owe to the bank from
time to time ‘from whatsoever cause and howsoever arising’.
[14]
Relations between Barnard and his fellow shareholders deteriorated
over time.  Barnard was dissatisfied, amongst other
things, with
the manner in which the company’s accounts were being prepared
and considered that certain expenditure incurred
by the company
should have been attributed as remuneration paid to Greaves.  He
was also offended by what he regarded as a
lack of transparency by
Greaves and Knapp in regard to aspects of the management of the
company.  Barnard’s unhappiness
with the situation within
the company resulted eventually in his convening a shareholders’
meeting on 4 April 2006,
at which he presented an offer to sell
his shares to Greaves and Knapp for the sum of four million rand.
(Greaves and Knapp
had been apprised individually before the meeting
by Barnard that he wished to dispose of his shares in the company.
Greaves
had responded to Barnard’s initial approach, which was
on 22 March 2005, by suggesting that Barnard should ask his
brother,
an attorney, to prepare appropriate documentation for
execution by the shareholders in order to effect a fair basis for a
parting
of their ways.)
[15]
At the meeting Greaves and Knapp requested time until 18 April 2005
to consider their reaction to Barnard’s offer.
Greaves,
however, presented Barnard with a letter referring to an alleged
intimation by Greaves that he had ‘not been working
for the
company for the past year’ and that he had been searching for
alternative means of employment, albeit not in competition
with the
company.  The letter from Greaves concluded, ‘What would
be your reaction towards a fellow director making
such admissions?
What would you expect of your fellow director?  I await your
advise (sic) by the 18
th
April 2005.’
[16]
Barnard responded to the aforementioned letter on the evening of
6 April 2005.  In his reply he alluded to the difficulties

he had with what he considered to be the lack of transparency in the
management of the company by his fellow directors and also
his
concerns about certain aspects of the personal life of Knapp.
He pointed out that as marketing director of the company
he was
‘actively involved in the best interests of the company’
and invited indications from Greave as to any area
in which he might
improve.  He reiterated his wish to terminate his involvement in
the company on mutually acceptable terms.
[17]
Approximately half an hour after delivery of Barnard’s reply to
Greaves’ letter, Barnard received a letter from
the company’s
attorneys, which was delivered by Knapp to Barnard’s home.
The letter gave notice of the intention
to institute proceedings for
the removal of Barnard as a director of the company, and informed
Barnard that pending the determination
of his removal he was
suspended as a director and prohibited from access to the company’s
offices or contact with its staff
or business connections.
[18] Barnard did not comply with the instruction not to
attend at the company’s offices.  It appears that various
attempts
of a somewhat melodramatic nature, which it is unnecessary
to describe, were made to intimidate him into compliance.  These

were unsuccessful.  The locks on the company’s premises
were then changed so that Barnard was prevented from exercising

access.  It was that conduct which led to the institution of the
spoliation proceedings before Motala J that were mentioned
in
the introductory section of this judgment.
[19]
On Friday, 8 April 2005, which was Barnard’s
last day in office before the locks were changed, he was handed a
notice
of a directors’ meeting to be held on Monday 11 April.
A draft resolution appended to the notice provided (i) for
the
convening of an extraordinary general meeting; (ii) waiver of
the provisions of the Shareholders’ Agreement; (iii) removal

of Barnard as a director and (iv) removal of Barnard from ‘all
official positions within the company’.  Barnard
protested
the short notice of the meeting, but it went ahead without him and a
resolution, purportedly in compliance with the provisions
of s 220
of the Companies Act, was carried removing him as a director.
In my view the legal effectiveness of the resolution
is not centrally
relevant, but as I heard much argument on the question it is
convenient to deal with its effect right away.
Barnard’s
counsel pointed in argument to various features concerning the
calling of the meeting, which demonstrated a vitiating
non-compliance
with the provisions of s 220.  The company’s counsel,
realistically, did not take serious issue
with the argument.
The somewhat tentative submission by the company’s counsel that
Barnard would have been prevented
by reason of conflict of interest
from participating in a decision on his removal as a director and
that non-compliance with the
statutory notice provisions was
therefore not material is without merit.  As a shareholder
entitled under the aforementioned
agreement to registration as a
member of the company, Barnard would have been within his rights to
participate in any decision
in respect of the appointment or removal
of directors, including any decision affecting his own position as
such.
[10]
It is in any event cogently arguable that Barnard’s removal
without his consent was incompetent by virtue of the unanimity

provisions of the Shareholders’ Agreement.
[11]
But it is not necessary to determine that point.  Effective or
ineffective, the steps taken by Greaves and Knapp to
remove Barnard
as a director are relevant only insofar as they might constitute
conduct by his co-shareholders and ‘quasi-partners’

justifying Barnard’s application for the provisional
liquidation of the company on just and equitable grounds, or for
relief
in terms of s 252 of the Companies Act.
[20]
Barnard then received a demand from the company’s
attorneys that he pay the amount of R192786, allegedly due in respect
of
his loan account in the company’s books.  He disputed
liability for the payment and requested information in support
of the
claim from the company’s auditors.  The auditors advised
Barnard that they had been instructed by the company’s

attorneys to refuse to provide him with the information he had
requested.
[21]
On 20 April 2005, Barnard received notice that he was required to
appear before a disciplinary enquiry on 22 April 2005
at the
offices of the company’s attorneys.  He complained about
the short notice and requested a postponement.
This was
declined.  Barnard did not attend at the disciplinary enquiry.
He was subsequently informed by letter, dated
26 April 2005,
that he had been dismissed as an employee of the company.  It
appears from the reasons furnished by the
disciplinary tribunal that
the essential basis for its conclusion that Barnard should be
dismissed was that it was clear ‘that
there is a breakdown in
the relationship and that, whatever the cause, it is now impossible
to restore the trust required for an
employment relationship’
[22]
Barnard challenged his dismissal in proceedings
before the CCMA.  His challenge was unsuccessful.  Despite
intimations
that he would take the determination by the CCMA on
review, as permitted in terms of s 145 of the Labour Relations
Act
[12]
,
he has failed to do so.
[23]
In the midst of the tumult just described, Barnard received a demand
from the attorneys representing both Greaves and the company
for
payment of the R125 000 purchase price of the shares Barnard had
acquired from Greaves.  When Barnard failed to pay the
demanded
sum within the seven day stipulated period, Greaves gave notice
through his attorneys that he had cancelled the agreement
in terms of
which Barnard had acquired the shares.  Barnard disputes the
validity of this cancellation on a number of grounds.
I shall
address this issue in my discussion later of the merits of the
application.
[24]
Barnard has been excluded from the business of the company since
8 April 2005.
Barnard’s
locus standi to apply for the company’s winding up on just and
equitable grounds
[25]
Turning now to decide whether it is competent for Barnard to apply as
a creditor for the provisional winding up of the company
on just and
equitable grounds:  As mentioned, the company took issue with
Barnard’s standing in this respect, contending
that in respect
of a solvent company able to meet its commitments a winding up in
terms of s 344(h) was a remedy peculiarly
available to a member
qualifying in terms of s 346(2) of the Companies Act.
Barnard’s counsel argued, however,
that the company’s
contention was at odds with the law as declared in
Sweet v Finbain
1984 (3) SA 441
(W)
.
[26]
In
Sweet v Finbain
, at 445D, O’Donovan J held
‘
Provided he can show that there is some ground
for winding-up, such as exclusion from the management, or justifiable
lack of confidence
in the conduct and management of the company,
grounded on the conduct of the directors, a creditor is entitled to
apply to Court
for a winding-up order on just and equitable
grounds
’.
In
my view it was unnecessary on the facts of the case for the judgment
to have gone as far as it did in this respect.  The
learned
judge had found that the applicant in that matter had had his name
unlawfully removed from the register of members by his
fellow
shareholders.  The unlawful removal of the applicant’s
name from the register would have been a nullity and it
was open to
the court to have disregarded it for the purposes of determining the
applicant’s standing.  The winding
up application was
therefore amenable to consideration as a member’s
application.
[13]
On my reading of the judgment that is indeed how it was determined –
I refer in particular to the statement by O’Donovan J
at
445 C-D: ‘
An applicant cannot be in a
worse position where the management of a company unlawfully deletes
his name from the register of members,
or causes his shares to be
transferred to another – a matter to which the Court cannot be
required to shut its eyes.
’
[27]
I admit to having been sceptical in any event
about the correctness of the court’s analysis in
Sweet
v Finbain
of the effect of the provisions of
s 346(1)(b) read with s 344(h) of the Companies Act.
It seemed to me
prima facie
that there was cogency in the company’s contention that a
creditor’s interest in the winding up of a company went to
the
ability of the company to pay its debts and that just and equitable
grounds for the winding up of a company were therefore
an issue of
peculiar interest to members rather than creditors.
[14]
Such authority on the point that I have subsequently been able to
find has however persuaded me that my scepticism was to
a certain
extent misplaced.  But I remain of the opinion that the passage
from the judgment quoted above is amenable to being
construed more
widely than probably intended.  A creditor may indeed found an
application for the winding up of a solvent
company on just and
equitable grounds, but only if it is shown that it has a cognisable
interest
qua creditor
,
in so doing.  Where an applicant for the winding up of a company
is both a shareholder and a creditor, the clear distinction
between
the applicant’s rights and interests in each of those
respective categories of standing must be recognised.
[15]
[28]
Kia
Intertrade Johannesburg (Pty) Ltd v Infinite Motors (Pty) Ltd
[1999]
2 All SA 268
(W)
, at 277, was a case which
involved a claim by a creditor of a solvent company for its winding
up under the just and equitable ground.
Wunsh J, having
referred to the description in
Rand Air (Pty)
Ltd v Ray Bester Investments (Pty) Ltd
1985 (2) SA 345
(W)
of the five broad categories of cases in which the courts here and in
England have considered it just and equitable that a company
be wound
up and having noted that the case before him did not fall into any
one of those established categories, cited O’Donovan J’s

dicta in
Sweet v Finbain
at
444H–445A with approval and granted the application.  It
is significant however that in doing so, the learned judge
specially
listed a number of facts that in principle supported the applicant’s
interest, peculiarly qua creditor, in the
winding up of the
respondent company on just and equitable grounds.
[16]
[29]
Support is
also to be found for O’Donovan J’s approach - construed
in the narrower sense in which I believe it falls
to be applied - in
various judgments of the Australian courts dealing with equivalent
provisions in s 461(1)(k)
[17]
and s 462(2)(b)
[18]
of the Australian Corporations Act, 2001.  See
Allstate
Exploration v Batepro
[2004]
NSWSC 261
[19]
at paragraphs 20-26 and
Deputy
Commissioner of Taxation of the Commonwealth of Australia v Casualife
Furniture International Pty Ltd
[2004] VSC 157
[20]
,
especially from paragraph 448.
[21]
[30]
In the
context of the reference to them in argument, it is necessary to
point out that notwithstanding a tendency in some cases
to have
treated them as such, the five categories of just and equitable
grounds cited in
Rand Air
,
supra, are not juristic niches in any formal sense.  They are
merely the categorisation, in five groups, of examples of similar

types of case in which a winding up has been granted under the just
and equitable ground.  Categorisation in this manner is
helpful
because it promotes greater predictability in the application of the
relevant law;  it does not connote, however,
that establishing a
case for relief under this head in a matter which on its facts falls
outside the categorised examples requires
a substantive development
of the law.  To the extent that some reported judgments might be
read as suggesting otherwise,
[22]
I respectfully differ.  The well established principle that an
unrestricted breadth of considerations might, depending on
the
peculiar facts of a case, affect a finding as to what would be just
and equitable in the given circumstances
[23]
makes it inappropriate that the enquiry should in any way be confined
by the influence of the established categories.  Recognising

this does not however mean that the just and equitable ground may
properly be treated as an unprincipled ‘catch all’
for
obtaining the liquidation of a company.
[24]
[31]
In this matter I was impressed by the argument by Barnard’s
counsel that in the peculiar circumstances of Barnard being
a
contingent creditor of the company by virtue of his having bound
himself as surety for its liability to FirstRand Bank - plainly
only
because of his relationship with the company under the Shareholders’
Agreement - an objectively demonstrable and logical
connection has
been established, because of his exclusion from the company’s
management, between Barnard’s position
as a creditor-applicant
(within the contemplation of s 346 of the Companies Act) and the
grounding of his claim under the
just and equitable ground (under
s 344(h) of the Act).  In the result the challenge to
Barnard’s
locus standi
to make the application on just
and equitable grounds must be rejected.
Has
a case been made out in terms of s 344(h) of the Companies Act?
[32]
It remains necessary however, to consider whether Barnard has made
out a good case as a contingent creditor for the winding
up of the
company.  For the reasons mentioned earlier it will not suffice
for this purpose for him merely to show that, apart
from his
inability to comply with s 346(2), he would have been entitled
to the relief had he brought the application as a
member.
[33]
There is no evidence that the company is being
managed by Greaves and Knapp in a manner that is likely to render it
unable to pay
its debts as and when they fall due.  I do not
consider it necessary to discuss the various allegations that Barnard
has made
about what on the face of things might amount to financial
mismanagement by Greaves in particular.  It suffices to say that

the absence of sufficient substantiating detail renders them lacking
in probative force, even in the
prima facie
sense.
[25]
[34]
There is also no evidence that the conduct of the company’s
affairs is likely to result in Barnard’s position as
surety
being prejudiced in the sense of it having been shown that there is a
probability that his contingent creditor status will
be translated
into actual creditor status as a consequence of him being called upon
to make payment of the company’s debts
to First Rand Bank.
[35]
It is clear that Barnard undertook the contingent liability on the
basis that he would be in joint control of the company’s

business with the assurance that in terms of the Shareholders’
Agreement the company could not increase its indebtedness
without his
acquiescence.  There can be little difficulty in accepting
Barnard’s discomfort with the current position
and, viewed from
his perspective, it is easy to understand why he should consider that
it would be fair to for his suretyship obligation
to be terminated.
The winding up of the company would not however achieve that result.
He would still be contingently
liable for the company’s
indebtedness to the bank;  indeed a compulsory liquidation might
increase the prospect of the
contingent liability becoming a real
one.  All that a winding up would achieve is the avoidance of
the company incurring further
liability for which he might become
contingently responsible.
[36]
Considerations of justice and equity in a
situation like this require taking account not only of the
applicant’s position,
but also that of the other affected
parties.  It is not as if the suretyship cannot be terminated by
other means.
[26]
The suretyship obligation is an issue that Barnard would have had to
resolve with the Bank even if his proposal to withdraw
from the
company by selling his shares had been accepted by his
co-shareholders.  While the failure of the quasi partnership

relationship in the circumstances mentioned earlier might - in the
absence of a reasonable alternative remedy - have justified
a winding
up of the company at his instance as a member, I am not persuaded, in
the absence of adequate proof that the company
is being financially
mismanaged in a way that would prejudice his position as surety, that
a sufficient basis has been established
for Barnard to obtain the
liquidation of the company in his capacity as contingent creditor.
Indeed the suretyship obligation,
although described in some detail
in the founding papers, was not a matter centrally relied on in those
papers as the ground upon
which Barnard sought the winding up.
It was rather an aspect that was fastened on when the difficulty that
he faced in obtaining
a member’s winding up was brought home to
him.
[27]
The
claim for alternative relief in terms of s 252 of the Companies
Act
[37]
Turning then to consider the alternative relief of the nature
contemplated in terms of s 252 of the Companies Act sought
by
Barnard.  As mentioned, the application for this relief was
introduced at a late stage in response to the argument by the

company’s counsel that if it were to be found that a case for a
provisional winding up of the company had been made out,
Barnard
should nevertheless be deprived of success because of an unreasonable
failure to avail himself of a less drastic remedy.
In this
respect the company’s counsel called in aid my judgment in
Robson v Wax Works (Pty) Ltd and Others
2001
(3) SA 1117
(C); [2001] 3 All SA 546 (C)
and
that of Vinelott J in
Re a Company
[1983] BCLC
151
.  This defence had not been adumbrated in the company’s
answering papers and was raised for the first time in argument.
[38]
Inasmuch as
the respondents’ argument implied that Barnard should have
sought an order compelling either the company or his
co-shareholders
to buy him out, its advancement was not a little ironic in the
context of the behaviour of Greaves and Knapp when
Barnard had
suggested that very course at the outset; and also in the context of
the respondents’ denial that Barnard is
a shareholder in the
company.  Whereas the respondents advanced the alternative
remedy argument to address the eventuality
that I might have found
that Barnard had otherwise made a case for provisional liquidation,
Barnard introduced the application
for alternative relief also to
cater for the eventuality that his application for the principally
sought relief might fail.
[28]
In the latter context the necessity to consider the alternative
relief therefore arises quite independently of s 347(2)
of the
Companies Act.  Accordingly, it would ordinarily not have been
necessary to consider whether or not the respondents
have discharged
the onus contemplated in s 347 to demonstrate that another
remedy should have been applied for.
[29]
However, because of an argument advanced by the respondents’
counsel in respect of costs, with which I shall treat
later, it is
appropriate to record in that connection that in the absence of any
relevant averments in the answering affidavits
I am of the view that
I could not have found on the papers, had it been necessary to
determine the question, that the respondents
had discharged the onus.
[39]
Section 252 of the Companies Act provides insofar as is relevant:
(1) Any member of a company who complains that any
particular act or omission of a company is unfairly prejudicial,
unjust or inequitable,
or that the affairs of the company are being
conducted in a manner unfairly prejudicial, unjust or inequitable: to
him or to some
part of the members of the company, may, subject to
the provisions of subsection (2), make an application to the Court
for an order
under this section…
(3) If on any such application it appears to the
Court that the particular act or omission is unfairly prejudicial,
unjust or inequitable,
or that the company's affairs are being
conducted as aforesaid and if the Court considers it just and
equitable, the Court may,
with a view to bringing to an end the
matters complained of, make such order as it thinks fit, whether for
regulating the future
conduct, of the company's affairs or for the
purchase of the shares of any members of the company by other members
thereof or by
the company and, in the case of a purchase by the
company, for the reduction accordingly of the company's capital, or
otherwise.
[40]
The alternative relief sought by Barnard is for orders directing
Greaves and Knapp to purchase his shares in the company at
a price
determined by agreement between two chartered accountants, one
appointed by Barnard and the other by Greaves and Knapp.

Barnard seeks an order directing the aforementioned price to be
determined as at 8 April 2005, being the date of his expulsion

from the management of the company and seeks payment of that price
plus interest thereon at the prescribed rate from 9 April
2005
to date of payment.  Although the amended notice of motion does
not expressly make reference to s 252 of the Companies
Act, in
the context of the allegations in the founding papers of unfairly
prejudicial, unjust or inequitable conduct affecting
him, the content
of the alternative relief sought is plainly predicated on the
provision.
[41]
The provisions of s 252 are available to
‘members’ – i.e. registered shareholders.  On
the peculiar
facts of the current matter I do not consider the fact
that Barnard is not yet registered as a member is an obstacle to his
resort
to s 252.  I have already found that Barnard is a
shareholder entitled as against the company to obtain the insertion

of his name on the members’ register.
[30]
In paragraph 2 of the notice of motion, Barnard has sought an
order in the following terms:
‘
That in as much as may be necessary, the
[company]
is ordered to rectify its Members Register to
include and reflect
[Barnard]
as a shareholder of the
[company]’
In
my view it is competent for a shareholder who has not obtained
registration of his membership of the company because of opposition

or lack of cooperation by the company or his fellow shareholders, but
is entitled to such registration, to apply in the same proceedings

for an order directing his enrolment on the register of members and,
in anticipation of the grant of such an order, as a member
for relief
in terms of s 252.  The requirements of s 346(2) of
the Companies Act and the considerations thereanent
traversed in
Rubenstein NO and Another v Langhold (Pty) Ltd
1983 (2) SA 228
(C)
, which would
prohibit such an approach in the context of an unregistered
shareholder seeking the winding up of a company in terms
of s 344(h)
of the Act, do not apply in the context of an application for relief
in terms of s 252.
[42]
It would be inappropriate to grant the alternative relief sought by
Barnard if the contract in terms of which he had purchased
the shares
from Greaves had been cancelled, as contended by the latter.
The respondents’ counsel submitted that for
the purposes of the
application I was bound by the
Plascon Evans
evidentiary rule
to accept the respondent’s evidence that the sale had been
cancelled.  I do not agree.  There are
no relevant factual
disputes.  It is common ground that Greaves purported to cancel
the contract.  The circumstances
in which he did so are also not
contentious.  The only aspect that is in dispute between Barnard
and Greaves is whether or
not Barnard has paid for the shares.
I accept that I am obliged for present purposes to assume that
Barnard has not yet paid
for the shares.  It does not follow,
however, that Greaves was entitled to cancel the sale agreement.
[43]
As described earlier, the sale agreement provided that payment for
the shares was to be effected to Greaves from the dividends

subsequently payable by the company to Barnard, qua shareholder.
By purporting to place Barnard on terms to pay the purchase
price on
seven days notice, Greaves sought to impose an obligation on Barnard
outside the agreement, and concomitantly purported
to ascribe to
himself a contractual right to payment at odds with anything provided
in the contract.  Even if one were to
assume that Barnard had
been lawfully removed as a director, that would not terminate his
right to the dividends which Greaves
had agreed to look to for
payment.  It is clear that Greaves’ purported cancellation
of the sale on the grounds of alleged
non-payment was unlawful.
No other basis for a valid cancellation was suggested.
[44]
It follows that Barnard has the required standing to make the
application for relief in terms of s 252 of the Companies
Act.
[45]
It remains to consider whether Barnard has proven unfairly
prejudicial, unjust or inequitable conduct.  It would not be

enough for him just to show that he was unhappy in his relationship
with his fellow shareholders and wished to withdraw from the

company.  But the events after 8 April 2006, described
earlier in this judgment, have taken Barnard’s case further

than that.  It is clear that he has been excluded from the
management of the company against his will in a manner inconsistent

not only with the provisions, but also the spirit of the
Shareholders’ Agreement.  The manner in which a
shareholders’
meeting was convened on improperly short notice
to remove him as a director of the company, as well as the way in
which a disciplinary
enquiry was convened, also in circumstances
redolent of procedural unfairness, substantiate Barnard’s
allegation that the
affairs of the company are being conducted in a
manner unfairly prejudicial, unjust or inequitable to him.  The
demand for
payment of his loan account coupled with the instruction
by the company’s management to the company’s auditors to
refuse
him access to the financial information reasonably required by
him to confirm his account with the company provides further
illustration
of the validity of Barnard’s complaint about his
treatment.  The manner in which he was despoiled of peaceful
possession
of his office at the company’s premises is another
relevant instance of unfair and prejudicial conduct by the company.

This court has already held in the judgments of Motala J and of
the Full Bench in the spoliation proceedings referred to above
that
Barnard’s occupation of the premises in question was connected
with his position as shareholder in a company with a

‘quasi-partnership’ character.  The allegation that
Barnard was himself responsible for the breakdown in relations
by
failing to apply himself to his duties is unconvincing.  There
is no evidence of any complaint having been articulated
before
Barnard announced his wish to withdraw from the company.  On the
contrary, shortly before this Barnard had been awarded
a salary
increase.
[46]
At part 6 of his speech in
O’Neill and
Another v Phillips and Others
[1999] UKHL 24
;
[1999]
[1999] UKHL 24
;
1
WLR 1092
;
[1999] 2 All ER 961
(HL)
, Lord Hoffmann, delivering
the principal opinion in an appeal to the House of Lords concerning a
petition under the English equivalent
of s 252, gave as a
‘
standard case
’ of unjust, inequitable or unfair
treatment the example ‘
in which shareholders have entered
into association upon the understanding that each of them who has
ventured his capital will also
participate in the management of the
company.  In such a case it will usually be considered unjust,
inequitable or unfair
for a majority to use their voting power to
exclude a member from participation in the management without giving
him the opportunity
to remove his capital upon reasonable terms.’
In my judgment the current matter is another such ‘standard
case’.
[47]
The formulation of appropriate relief in terms of
s 252 of the Companies Act is complicated by two issues that it
is not possible
for me to determine on the papers: firstly, the value
at which Barnard’s shares should be redeemed, and secondly, the
issue
of whether or not Barnard has paid Greaves for the shares,
whether in whole or in part.
[31]
(As to the second issue, notwithstanding my findings earlier on the
payment provisions of the Shareholders’ Agreement,
it must
follow that if the shares are to be sold back to his fellow
shareholders Barnard must account
pari passu
to Greaves for any outstanding purchase consideration.)
[48]
Both of these issues concern matters on which the parties would be
well advised to reach agreement.  With appropriate
co-operation
from the company’s management (Greaves and Knapp), it should be
feasible to obtain an independent valuation
of Barnard’s
shareholding.  An appropriate accounting by Greaves and the
company should enable a determination whether
Greaves has received
any benefits from the company in lieu of dividends or other payments
that would ordinarily have accrued to
Barnard and which fell to be
appropriated as payment for the shares purchased by Barnard.  It
is also desirable that any amount
in which Barnard may be indebted to
the company on loan account should be settled in the context of his
ceasing to be a shareholder.
Provision will be made for this in
the order that will issue.
[49]
If the parties are unable to co-operate sensibly
the outstanding questions will have to be resolved in the context of
further litigation.
[32]
The order I shall make, although directed as far as possible to try
to bring an end to the disputes between the parties under
this head
without further litigation, will make contingent provision for such
an eventuality.  (I should emphasise, however,
that nothing in
this judgment should be construed to suggest that in the event that
Greaves and Knapp are obstructive in giving
effect to the relief
granted in terms of s 252, or unable to pay for the shares that
they are required to purchase, Barnard
should be prevented by the
order made in this matter from renewing his endeavour to wind up the
company – next time as a
registered member.  Indeed, had
Barnard’s application in the current proceedings been properly
brought, qua member,
it may well have succeeded because of the
conduct of Greaves and Knapp that suggested an unwillingness to allow
Barnard to withdraw
his capital in the context of his exclusion.
[33]
)
[50]
It is appropriate that Barnard should be
compensated for his shares at the value they enjoyed when he was
excluded from the management
of the company.  This will address
the concerns that he has voiced about the assets of the company being
subsequently transferred
to another company in which Greaves and
Knapp currently do business, Carl Greaves Financial Services (Pty)
Ltd.  It will also
ensure, in fairness to Greaves and Knapp,
that Barnard is not unduly favoured by any improvement in the value
of the shares by
their efforts after Barnard ceased to work in the
company.  In my judgment it is appropriate that Greaves and
Knapps be directed
to acquire 13 and 12 shares respectively of
Barnard’s 25 shares.  This will mean that their current
ratio
inter se
of
shareholding in the company will be maintained.  It will also
mean that they will be more or less equally advantaged or

disadvantaged, as the case might be, by the effect of the relief
granted to Barnard.  As the two of them adopted a common

position in respect of the exclusion of Barnard from the company, I
consider this to be an equitable solution.
[34]
They are of course at liberty to rearrange matters between themselves
after complying with the order.
[51]
Barnard’s claim for interest on the purchase consideration with
effect from 8 April 2005 will not be granted.
There is no
reason for the second and third respondents to be penalised in this
respect, particularly considering that the claim
for relief in terms
of s 252 was only instituted by amendment to the notice of
motion effected on 25 October 2006, and
then without any
evidence being offered on the value of the shares.  I shall
however make provision for the payment of interest
on the purchase
consideration at the prescribed rate with effect from seven days
after the independent valuation of the shares
to be undertaken in
terms of the order, provided transfer of the shares is tendered by
Barnard within that period.
Costs
[52]
As a factor of the parallelism mentioned
earlier
[35]
,
the facts and much of the argument relevant to Barnard’s
unsuccessful application for the winding up of the company were

equally applicable to the application for relief in terms of s 252.
As Barnard has been successful in the latter application,
I consider
it appropriate that he should be awarded his costs, including the
costs of the application for the principally sought
relief and that
liability for these costs should lie with the first, second and third
respondents, jointly and severally.
I am not willing to accede
to the argument by the respondents’ counsel that Barnard should
get his costs only from the time
that the prayers for alternative
relief were introduced.  That approach would be artificial and
inappropriate because of the
overlap that I have just described.
Another factor that has weighed with me is that although it is so
that the alternative
application was introduced only in response to
the argument advanced by the respondents’ counsel, the failure
of the winding
up application was nevertheless not because the
respondents had raised a defence in terms of s 347(2) of the
Companies Act
and successfully discharged the attendant onus.
THE
APPLICATIONS CONCERNING THE MEANING AND EFFECT OF THE ORDER MADE BY
MR JUSTICE MOTALA
[53]
The background to the application and the related counter-application
concerning the meaning and effect of the relief granted
by Motala J
in case no. 3110/2005 has been summarised in paragraphs [3] and
[18], above.
[54]
The relevant provision in the order made by Motala J was framed
as follows (in paragraph 3): ‘
That the Respondents are
interdicted and restrained from preventing or attempting to prevent
the Applicant from lawfully being present
at the Third Respondent’s
[i.e. the company’s]
place of business.
’
Paragraphs 1 and 2 of the order directed the respondents to restore
the original locks and access codes to the premises
at 29 Douglas
Carr Drive, Bellville so that Barnard could gain entry to the
premises and authorised the Sheriff to do so in
the event of
respondents failing to comply with the directive.  The reasons
for judgment make it clear that the learned judge
had characterised
the application (or at least that part of it in respect of which he
granted any relief) as an application for
a spoliation order.
The judgment of the Full Bench also referred to the application as
‘spoliation proceedings’
and described the relief granted
in the following terms: ‘Appellants were ordered to restore
possession to him of certain
office premises situated at 29 Carr
Drive, Bellville, Western Cape’.
[55]
The
mandament van spolie
is a possessory remedy.  It is used to restore possession to an
applicant that has been despoiled of property or the use of

property.  It is most frequently used to restore the status quo
ante spoliation so that due process must be followed to establish

which of the protagonists has the legal right to possession of thing
in contention.  It is a restraint against inappropriate
self
help.  It is not a remedy available to someone who seeks to
obtain initial possession of property, or to take back property
to
which they contend they are entitled from someone with established
possession of it.
[36]
Barnard was despoiled of possession of the offices at 29 Douglas
Carr Drive.  It was to restoring his possession
of those
premises that the relief granted by Motala J was directed.
The order granted in case no. 3110/05 was not intended
to achieve any
more than to restore Barnard to the spoliated property.
[56]
In my view there is nothing ambiguous about the order made by
Motala J.  The application by the company, Greaves
and
Knapp, by way of principal relief, for an amplification of paragraph
3 to refer expressly to 29 Douglas Carr Drive, Bellville
was
accordingly unnecessary.  The application in the alternative for
interdictory relief was predicated on the assertion that
Barnard was
neither a director nor a shareholder of the company.  Both these
assertions have been found to be unfounded.
It is not necessary
in the context of the relief to be granted in terms of s 252 of
the Companies Act to make a finding whether
Barnard was entitled as
director and shareholder to access to the new premises.  I have
however not been satisfied that a
case was made out for the
interdictory relief sought by the company.
[57]
For the reasons stated in paragraph [55], there was no merit in the
counter-application.
[58]
In the result both the application and the counter application in
case no. 8263/06 will be dismissed with costs.
THE
SPOLIATION APPLICATION IN RESPECT OF THE PREMISES CURRENTLY OCCUPIED
BY BREDENHANN
[59]
I outlined the factual background to this application in paragraph
[4], above.
[60]
The
mandament van spolie
is intended to be a robust remedy for the purpose of restoring the
status
ante quo
dispossession, irrespective of the underlying contested rights to the
object or right in issue.  These features have led to
the remedy
sometimes being described as an interim remedy.
[37]
An applicant for relief under the
mandament
is expected to act expeditiously in claiming it.  The rationale
for the remedy is undermined when, as in the current case,
a lengthy
interval and altered circumstances have intervened between the
offending dispossessing act and the availment of the remedy.

Although it has often been held that the scope for the exercise of
judicial discretion to refuse the remedy is extremely limited,
the
cases show that the remedy will not be granted where it would be
impractical or purposeless.
[38]
[61] What was in issue when Barnard was dispossessed of
the right of access to the premises at 29 Douglas Carr Drive was
his
right as a ‘quasi-partner’ shareholder in Carl
Greaves Brokers (Pty) Ltd to obtain admission to the premises as the

company’s place of business.  Owing to the passage of time
and the intervening removal of the company’s offices
to a
different address and also the sale of the property to a third party
who is now in occupation, the restoration to Barnard
of access to the
premises in the current circumstances will not restore the status
quo
ante
.  Indeed Barnard appears to realise the artificiality
of the restoration of the premises to him at this stage and explains

that he seeks the relief so as to be able to ensure that the property
is being properly maintained so as not to fall in value.
I find
it unnecessary to express any view on this explanation.  It is
sufficient to point out that Barnard’s interest
in the value of
the property has been addressed in the order that I shall make in
respect of his claim in term of s 252 of
the Companies Act.
His shares in Carl Greaves Brokers (Pty) Ltd, which is the parent
company of the registered owner of the
property, fall for the
purposes of compliance with that order to be valued as at 8 April
2005, and accordingly, any subsequent
change in the market value of
the immovable property can be of no practical interest to Barnard.
[62]
In the circumstances I consider that it would be inappropriate to
grant the relief sought by Barnard to have the property restored
to
him.  In my judgment the institution of the application by
Barnard when he had a pending winding up application already
set down
for hearing was also inappropriate.  I however have an
unresolved discomfort about the propriety of the sale of the
property
at the instance of Greaves and Knapp and the consequent installation
there of Bredenhann while the right to possession
of it was subject
to their appeal against the order made by Motala J.  I
intend to give effect to this by declining,
when dismissing the
application, to make a costs order in their favour or the companies
controlled by them.  I shall however
make a costs order in
favour of Bredenhann because I have, in effect, upheld his contention
against the grant of the order on grounds
of impracticability.
ORDERS
[63]
In the result the following orders are made:
A.
In case no. 8021/06 (the winding up
application):
(a) The winding up application is dismissed.
(b) The first respondent (i.e. Carl Greaves Brokers
(Pty) Ltd) is directed, insofar as may be necessary, to rectify its
register
of members to reflect that Juan Barnard is the holder of 25
of the 100 issued shares in the company pursuant to the Shareholders’

Agreement concluded between the applicant and first, second and third
respondents, dated 12 March 1998.  The first respondent
is
further directed forthwith to issue the applicant with an appropriate
certificate in respect of the registration of his aforementioned

holding so as to enable him to tender transfer thereof in terms of
the further relief granted in paragraph (c), below.
(c) In respect of the application for alternative relief
in terms of s 252 of the Companies Act 61 of 1973, the following
relief
is granted:
(i) The second and third respondents (i.e. Greaves and
Knapp, respectively) are directed to purchase 13 and 12 shares
respectively
of the applicant’s 25 shares in the first
respondent at fair value calculated pro rata the total issued share
capital, that
is, without any discount for the shares representing a
minority holding and without any discount on account of the
contractual
restrictions agreed upon between the shareholders on the
disposal of the shares other than as between themselves.
(ii) For the purpose of the said purchase of the
applicant’s shares by the second and third respondents, the
fair value of
the shares shall be determined with regard to the
financial condition of the first respondent as at 8 April 2005.
(iii) The total purchase consideration payable to the
applicant for his shares shall be adjusted downwards in an amount
equivalent
to any the sum, if any, in which he is indebted to the
company in respect of any loan account.  In consideration for
this
the applicant’s indebtedness, if any, to the company will
be assumed by second and third respondents, respectively, pro rata

the shares to be acquired by them and the applicant’s
indebtedness, if any, to the company shall thereupon be extinguished.
(iv) The second and third respondents shall be liable to
pay mora interest at 15.5% per annum on the purchase consideration
determined
in respect the aforementioned 25 shares-
(aa) with effect from the date upon which the purchase
consideration of the said shares is independently determined as
directed
in this order, provided that such interest shall be payable
only in the event of the applicant having tendered transfer of the
shares to the second and third respondents at a consideration
equivalent to the said determination within seven days of the
publication
to the parties of the determination, or
(bb) in the event of such determination being
successfully challenged, as further provided below, mutatis mutandis
with effect from
the date of the determination of the relevant
litigation.
(v) The parties are directed to endeavour to agree upon
the appointment of a practising chartered accountant of not less 10
years’
standing, who shall not be the company’s auditor,
nor have been previously professionally engaged in any capacity by
any
of the parties, to undertake the valuation of the shares in
accordance with the directions in sub-paragraphs (i) and (ii), above

and to determine the purchase consideration in accordance with
sub-paragraph (iii).  In the event of the parties being unable

so to agree within 10 days of the date of this order, the valuation
and determination shall be undertaken by a Cape Town based
practising
chartered accountant of not less 10 years’ standing to be
nominated by the President of the South African Institute
of
Chartered Accountants.
(vi) The costs of the said valuation and determination
shall be borne as to one half by the applicant of the one part and
one half
by the second and third respondents jointly of the other
part; and in the event of any party paying more than their share of
the
costs that party shall be entitled to recover the excess from the
other parties pro rata.
(vii) The applicant and the first, second and third
respondents are directed to furnish the person appointed in terms of
sub-paragraph (iv)
with all such information, appropriately
vouched, as he or she might reasonably require in order to undertake
the valuation and
determination, failing which the said person is
authorised to make application through the chamber book to a judge
for such further
directions and relief as might be appropriate.
(viii) The person appointed in terms of
sub-paragraph (iv) shall complete the valuation and
determination and furnish each
of the parties with a reasoned report
thereon in writing within six weeks of his or her appointment, or
such extended period as
the parties may agree to in writing, failing
which he or she shall file a written statement with the Registrar, a
copy of which
shall be furnished to each of the parties, setting out
the reasons for the failure to complete the valuation and setting out
the
period within which and the conditions subject to which he or she
then expects to be able to complete the work.  Without
limitation
of rights, any of the parties shall be entitled in the
context of such statement to apply through the chamber book to a
judge for
such further directions or relief as might be appropriate.
(ix) In the event of the applicant or the second or
third respondents being unwilling to accept the determination of the
person
appointed in terms of sub-paragraph (iv), proceedings to
obtain a judicial substitute valuation shall be instituted by the

dissatisfied party or parties within 20 days of the publication of
the valuation, failing which the independent determination made
in
terms of this order shall be final and binding on the parties.
(x) The first and second respondents are directed to
furnish an accounting in writing to the applicant within 15 days of
the date
of this order in respect of-
(aa) all dividends declared and paid by the company
subsequent to the conclusion of the Shareholders’ Agreement and
any appropriation
by the second respondent (in terms of clause
2.1.4.1 of the Shareholders’ Agreement) of such dividends as
might ordinarily
have been payable to the applicant;
(bb)all other benefits paid by the company to
shareholders;
(cc) all commission and other amounts earned for the
company by Barnard and the appropriation of such by the company;
(dd) all amounts left in the first respondent as
‘capital investment’ within the meaning of clause 2.1.4
of the Shareholders’
Agreement;
(ee) all withdrawals by the shareholders of amounts left
in the first respondent as ‘capital investment’ within
the
meaning of clause 2.1.4 of the Shareholders’ Agreement;
(ff) any other information reasonably required in order
to determine whether, and if so by how much, the applicant’s
liability
to make payment to the second respondent in the sum of
R125000 in terms of clause 2.1.4.1 of the Shareholders’
Agreement
has been liquidated or reduced.
(xi) The first and second respondents shall file a copy
of the aforementioned statement of account with the Registrar under
cover
of a filing notice indicating the case number in these
proceedings.
(xii) In the event that the applicant and the second
respondent are unable on the basis of the account furnished in terms
of sub-paragraph
(x), above, within 10 days to determine and reach
agreement on the amount, if any, by which the purchase price of
R125000 in respect
of the shares sold in terms clause 2.1.4.1 of the
Shareholders’ Agreement has been reduced, the applicant shall
institute
proceedings within 20 days of the date upon which he is
furnished with the statement of account for a debatement of the said
account
together with appropriate declaratory relief, failing which
it may be presumed (without prejudice to the applicant’s actual

rights) for the purposes of computing the purchase consideration
payable by the second respondent to the applicant in terms of

sub-paragraph (i), above, that the applicant has not paid for the
shares, alternatively that he has not paid such part of the price
of
the shares payment of which remains in dispute, and the said
consideration payable by the second respondent may be adjusted
as if
a set-off were applicable.
(xiii) The applicant shall be deemed to have resigned as
a director of Carl Greaves Brokers (Pty) Ltd with effect from 8 April

2005.
(d) The first, second and third respondents shall be
liable jointly and severally to pay the applicant’s costs of
suit, which
shall include the costs of the winding up application.
(e) There shall be no order as to costs in the
application by the second and third respondents for leave to
intervene.
B.
In case no. 8263/06 (the application
and counter-application concerning the meaning and effect of the
order made by Motala J
in case no. 3110/05):
(a) The application is dismissed with costs.
(b) The counter-application is dismissed with costs.
C.
In case no. 10622/06 (the
application for joint possession of the property occupied by
Bredenhann)
(a) The application is dismissed.
(b) The applicant is directed to pay the first
respondent’s (i.e. Bredenhann’s) costs of suit.
(c) Save as provided in terms of paragraph (b), no order
is made as to costs.
A.G.
BINNS-WARD
Acting
Judge of the High Court
[1]
Greaves and Knapp applied for
and were granted leave to intervene as second and third respondents
respectively in the application.
Barnard did not oppose their
application to intervene.
[2]
I use the term colloquially.
[3]
The sale was in fact
concluded by the wholly owned subsidiary of the company, The
Insurance Broking Shop (Pty) Ltd, which is the
registered owner of
the property.
[4]
Members of the company would
ordinarily be the applicants in four of the oft-mentioned five
categories of examples listed in
Rand-Air
(Pty) Ltd v Ray Bester Investments (Pty) Ltd
1985 (2) SA 345
(W)
,
at 350, under which companies are wound up on just and equitable
grounds.  The exception might be in the case of the second

category, being applications in terms of s 344(h) of the
Companies Act founded on the alleged illegality of the objects
of
the company which it is sought to have wound up, and fraud committed
in connection therewith.
[5]
In terms of para. 2 of the
notice of motion, an order was sought for the ‘rectification’
of the company’s register
of members to include Barnard’s
name.  I do not consider that rectification of the members’
register would overcome
the difficulty Barnard has in the context of
the requirements of s 346(2) of the Companies Act.
‘Rectification’
in the context sought by Barnard would,
if granted, amount to an order requiring the share register to be
amended to reflect
the current shareholders of the company, as
contended by Barnard.  It would not be a rectification in the
true sense; that
is a formal correction of a past mistake, or
unlawful entry in or deletion from the register.  A
rectification in the true
sense could operate retrospectively,
correcting the mistake with effect from the time it was made-
compare
In re M.I.
Trust (Pty) Ltd and Others v Morrny’s Motor Supplies (Pty) Ltd
1952 (3) SA 262
(W)
.
I shall however return to amendment of the share register in a
different context later in this judgment.
[6]
The Shareholders’ Agreement records that Greaves held 97
shares, but in
the answering
affidavit deposed to by him on behalf of the company Greaves averred
that the Shareholders’ Agreement was
erroneous in this respect
and that he had in fact held the 100 issued shares in the company.
[7]
Clause 2.1.4.1 of the
agreement also provides for the purchase price to be paid ‘…
from
the commission and other amounts that Juan Barnard earns for the
Company as insurance and property broker and such amounts
will be
left in the Company as capital investment and will be withdrawn by
[Greaves]
as
and when such amounts are available
’.
It is not apparent to me how such ‘commission and other
amounts’ would become available to any of the
shareholders,
including Greaves or Barnard, if not as part of any dividends
declared by the company.  The evidence shed
no light on this
aspect, but it is unnecessary to make any determination upon it.
[8]
The finding that some form of
constructive delivery of the shares has taken place is also
supported by the averments made by Greaves
in support of an
application by him and Knapp for leave to intervene as second and
third respondents in the winding up application.
Having stated
in his answering affidavit on behalf of the company that he held all
100 issued shares in the company (see fn 6),
Greaves averred in the
intervention application that he held 51 shares and that Knapp held
24 shares.  In the absence of
any explanation as to the
ownership of the remaining 25 shares, this would suggest a
recognition that they are held by Barnard,
as contemplated by the
Shareholders’ Agreement.  Furthermore, the resolution
purportedly adopted on 11 April
2005 removing Barnard as a
director of the company reflected the meeting as having been
attended by the holders of 72 of the
97 issued shares in the
company.  Read in the context of the content of the
Shareholders’ Agreement (and the purported
cancellation of the
sale of shares thereunder on 22 April 2005), the 72 shares in
question would appear to be those of Greaves
(49) and Knapp (23);
the 25 shares held by the non-attendee, Barnard, making up the
balance.
[9]
In
Robson
v Wax Works (Pty) Ltd and Others
2001 (3) SA 1117
(C); [2001] 3
All SA 546 (C)
,
I referred in passing (at para 37) to what I considered might be a
‘technical difficulty’ with the precise import
of the
concept of ‘quasi-partnership’.  (The ‘tag’
was spoken of as a ‘loose’ description
in
Hulett
and Others v Hulett
[1992] ZASCA 111
;
1992 (4) SA 291
(A)
at 307I-J.)  In
Strachan
v Wilcock
[2006] EWCA Civ 13
,
at para 18, the English Court of Appeal referred to it, in the
context currently relevant, in a way which suggests that in the

jurisdiction of its provenance the expression is one of (not always
helpful) convenience rather than precise juristic implication.

Lady Justice Arden held: ‘
In general,
the relationship between shareholders is governed exclusively by the
terms of the memorandum and articles of association
of the company
of which they are shareholders. Their rights and obligations are
derived from those documents and those documents
alone. In some
circumstances, however, equitable obligations will arise between
shareholders. The relationship where such equitable
obligations
exist is often labelled, not always helpfully, as a
"quasi-partnership". The classic statement of the law
as
to when such a relationship will arise is set out in the speech of
Lord Wilberforce in
Ebrahimi v
Westbourne Galleries Ltd
[1973]
AC 360
at 371.
’
The use of the label is well-established; it only becomes unhelpful
if it is allowed to confuse the difference in
law between being a
member of a partnership and a shareholder in a company.
[10]
The position is quite
distinguishable from the elementary principle that a director, qua
director, is not permitted to participate
in making decisions on
behalf of the company in matters in which he or she has a personal
interest.
[11]
Cf.
Stewart
v Schwab
1956 (4) SA 791
(T); Desai v Greyridge Investments (Pty)
Ltd
1974 (1) SA 509
(A)
at 518-9 and
Amoils
v Fuel Transport (Pty) Ltd
1978 (4) SA 343
(W)
at 347 and the discussion in
Henochsberg
on the Companies Act
5ed,
vol I at 423 (looseleaf issue 2); sv s 220.
[12]
Act 66 of 1995.
[13]
I do not consider that the
authority of the judgment of Vivier J in
Rubenstein
NO and Another v Langhold (Pty) Ltd
1983 (2) SA 228
(C)
is inimical to this conclusion.  See the learned judge’s
distinction (at 230-1) of the Vice Chancellor, Sir James
Bacon’s
judgment in
Re
Patent Steam Engine Co
(1878) 8 Ch D 464
,
which, terse as it might be, appears to me to be more in point by
way of comparative value on the facts in
Sweet
v Finbain
.
In
Patent Steam
Engine
the court
considered that it would constitute an intolerable technicality to
strictly apply the statutory registered membership
qualification in
an application for winding up by a person whose name did not appear
on the register of members because he had
been refused allocation
and registration of shares in the respondent company,
notwithstanding a court order of more than six
months’
antiquity directing that he be allocated the shares.  The
correctness of the judgment in
Patent
Steam Engine
has
been subjected to doubt in the subsequent decisions noted by
Vivier J.  The judicial philosophy underpinning the

judgment in
Patent
Steam Engine
would
however find a much firmer foundation for application on the facts
in
Sweet v
Finbain
.  In
the latter case the applicant had been a properly registered member
of the respondent company.  It would be a
misdirected
application of s 346(2) to hold that the absence of his name on
the register when he brought the application,
by reason of its
unlawful deletion by his fellow members, served to divest him of the
standing he otherwise enjoyed to bring
a member’s winding up
application.
[14]
I have come across textbook references which would have supported
the company’s contention, but the views expressed in
those
references have been reconsidered in more recent editions.
Compare
Gower's Principles of Modern Company
Law
(4
th
ed) p.658, where it was stated that ‘
a
creditor's petition on the just and equitable ground is clearly
inappropriate’
.  In the sixth
edition, however, the
the
authors say instead (at p.749) that petitions for winding up may be
brought by creditors on the just and equitable ground,
though such
applications are rare.  Support for the company’s
contention might also be found in the approach of Coetzee
J in
Rand
Air
, supra, where the learned judge held (at
349I) that ‘
..the "just and
equitable" basis is rather a special ground under which only
certain features of the way in which a
company is being run or
conducted can be questioned to the point of requesting the court to
wind it up
’ and in the context of
dismissing an application by a creditor of a solvent company for its
winding up on just and equitable
grounds stated (at 351) ‘
When
one deals particularly with a solvent company, and it should be
borne in mind that all these categories
[i.e
the five categories mentioned in footnote 4, above, and referred to
further in para [28] and [30], below]
that I
have enumerated really relate to solvent companies, a Court will
have to be persuaded on very adequate grounds that there
is need for
a further category, such as merely the advisability of having its
affairs investigated in this particular way. In
my view this does
not lie within the general line of thrust of legislative intention
as interpreted by Courts here and in England.
’
[15]
Cf.
Choice Holdings Ltd and Others v Yabeng
Investment Holding Co Ltd
2001 (3) SA 1350
(W); [2001] 2 All SA
539 (W)
at para 20-22.  See also the
discrete treatment of the claims for winding up by an executor of a
deceased estate with reference
to the deceased’s standing as
an alleged contributory and as a creditor in
Katsapas
v Norvalspont Investments (Pty) Ltd
1969
(4) SA 403
(O)
.
[16]
The learned judge held at
279-280, ‘
The
just and equitable ground for winding-up is not a catch-all to
simply liquidate a company that is, for example, running its

business at a loss or reducing its scale. But, in my opinion, where
a company (a) has closed a number of branches of its business,
(b)
has retrenched staff to a considerable extent, (c) has virtually
closed its head office, (d) is diverting funds which should
be used
to pay its debts to an overseas concern on grounds which are not
satisfactorily explained, (e) to excuse the non-payment
of its
liabilities sets up a contrived and baseless counterclaim, and (f)
has transferred assets outside the ordinary course
of business, it
is just and equitable that the creditors should be protected from
further losses and that it should be prevented
from disposing of
assets and incurring further liabilities.
’
[17]
Sec 461(k): ‘
The
Court
may
order
the winding up of a
company
if:…
the
Court
is
of opinion that it is just and equitable that the
company
be wound up.
’
[18]
Sec 462(2): ‘
Subject
to this section, any one or more of the following may apply for an
order
to wind up a
company
:
(a)
the
company
;
or
(b)
a creditor (including a contingent or prospective creditor) of the
company
;
or
(c) a
contributory
;
or
(d) …..
’
[19]
The judgment may be accessed
at http://www.austlii.edu.au/au/cases/nsw/supreme_ct/2004/261.html.
In that case the court
upheld the applicants’ standing, but
refused to appoint a provisional liquidator.
[20]
The judgment may be accessed
at http://www.austlii.edu.au/au/cases/vic/VSC/2004/157.html#fnB94.
In that case the court recognized
the standing of the
Deputy
Commissioner of Taxation, as a contingent creditor, to apply for the
winding up of various companies on just and equitable
grounds.
Winding up orders were granted under this head in circumstances
where the persons owning and conducting the business
of the
respondent companies were demonstrated to have had a history of
operating a business through various companies and stripping
those
companies of their assets which would be transferred to other
companies also owned and operated by themselves leaving the
stripped
companies unable to pay their tax liabilities.  It was
considered just and equitable that the respondent companies
(which
were solvent at the time of the applications) be wound up at the
instance of the tax collector in circumstances in which
it was
reasonably anticipated that the owners would manage their affairs in
a way which would be directed to render them ultimately
unable to
settle their tax obligations.
[21]
In an earlier judgment in
Port Kennedy Golf
Country Club Pty Ltd & Ors v Port Kennedy Resorts Pty Ltd &
Ors [2000] WASC 205
(at
para 6), a judge of the Western Australia Supreme Court remarked, in
the context of deciding an exception to an action for
winding up on
the grounds that the that the plaintiffs were not members of the
company: ‘
I was not referred to
any authority for the proposition that the just and equitable ground
in
s 461
(1)(k)
should be treated as being presented only for the benefit of
members. It is at least arguable that the ground is available
to all
of the persons mentioned in
s 462
.
’
[22]
Cf. e.g.
Rand
Air
, supra, at 350
I-351B;
Wiseman v
Ace Table Soccer (Pty) Ltd
1991 (4) SA 171
(W)
at 181 fin-182H; and
Securefin
Ltd v KNA Insurance and Investment Brokers (Pty) Ltd
[2001] 3 All SA
15
(T)
at 48.
[23]
Cf. .e.g.
Moosa,
NO v Mavjee Bhawan (Pty) Ltd and Another
1967 (3) SA 131
(T)
,
at 136H;
Sweet v
Finbain
, supra, at
444H-445A;
Tjospomie
Boerdery (Pty) Ltd v Drakensberg Botteliers (Pty) Ltd and Another
1989 (4) SA 31
(T)
,
at 45B and
Kyle and
others v Maritz & Pieterse Inc
[2002] 3 All SA 223
(T)
,
at para 30.
[24]
See Wunsh J’s remarks
in
Kia Intertrade
,
supra,
quoted in fn 16.
And compare Lord Hoffmann’s comments in part 5, s.v. ‘Unfairly
Prejudicial’, of his speech
in
O’Neill
and Another v Phillips and Others
[1999] UKHL 24
;
[1999] UKHL 24
;
[1999]
1 WLR 1092
;
[1999] 2 All ER 961
(HL):
‘
Petitions under section 459
[of the of the English Companies Act, 1985- which is the equivalent
of s 252 of the SA Act]
are often
lengthy and expensive. It is highly desirable that lawyers should be
able to advise their clients whether or not a petition
is likely to
succeed. Lord Wilberforce, after the passage which I have quoted
[the well known passage often referred to in SA judgments, see e.g.
Hulett and Others v Hulett
[1992] ZASCA 111
;
1992 (4) SA 291
(A)
at
307H;
Sweet v
Finbain
, supra, at
445E
]
, said that
it would be impossible "and wholly undesirable" to define
the circumstances in which the application of
equitable principles
might make it unjust, or inequitable (or unfair) for a party to
insist on legal rights or to exercise them
in particular way. This
of course is right. But that does not mean that there are no
principles by which those circumstances
may be identified. The way
in which such equitable principles operate is tolerably well settled
and in my view it would be wrong
to abandon them in favour of some
wholly indefinite notion of fairness.
’
[25]
See
Kalil
v Decotex (Pty) Ltd and another
at
1988 (1) SA 943
(A) at 979B–E;
Paarwater
v South Sahara Investments (Pty) Ltd
[2005] 4 All SA 185
(SCA)
,
at para 3.
[26]
Cf.
Kalil
v Standard Bank Of South Africa Ltd
1967 (4) SA 550
(A)
,
at 555G-H;
Langston
Clothing (Properties) CC v Danco Clothing (Pty) Ltd
[1998] ZASCA 66
;
1998 (4) SA 885
(SCA)
at 888H.
Counsel did not direct my attention to anything in the deed of
suretyship which might exclude the incidence of
the ordinary rule
that liability under a covering suretyship for further debts can be
excluded by notice given by the surety
to the creditor.  My own
cursory consideration of the deed suggested on the contrary that its
provisions appear to expressly
reiterate the incidence of the
ordinary rule.
[27]
Tellingly, in this
connection, although of no significance to the result of the winding
up application, Barnard did not apply
for the winding up of the
company’s wholly owned property owning subsidiary, for which
he had also stood as co-surety together
with Greaves and Knapp,
notwithstanding the concerns expressed by him in the spoliation
application (described at para [61],
below).
[28]
In
O’Neill and
Another v Phillips and Others
[1999] UKHL 24
;
[1999]
[1999] UKHL 24
;
1
WLR 1092
;
[1999] 2 All ER 961
(HL)
, at part
5 of his speech, Lord Hoffmann drew a useful illustration of the
operation of the parallelism between the concept of
justice and
equity in a winding up application of the sort contemplated by
s 344(h) of the SA Companies Act and unfairness
in a s 252
context, stating that the parallel ‘
does
not mean that conduct will not be unfair unless it would have
justified an order to wind up the company….
As Mummery J.
observed in
In
re A Company (No. 00314 of 1989), Ex parte Estate Acquisition and
Development Ltd.
[1991] B.C.L.C. 154
,
161, the grant of one remedy will not necessarily require proof of
conduct which would have justified a different remedy:
“
Under
sections 459 to 461
[of the English
Companies Act, 1985 – the statutory equivalent of our s 252
remedy]
the court is not. . . faced
with a death sentence decision dependent on establishing just and
equitable grounds for such a decision.
The court is more in the
position of a medical practitioner presented with a patient who is
alleged to be suffering from one
or more ailments which can be
treated by an appropriate remedy applied during the course of the
continuing life of the company.
”
The
parallel is not in the conduct which the court will treat as
justifying a particular remedy but in the principles upon which
it
decides that the conduct is unjust, inequitable or unfair.
’
[29]
Cf.
Moosa
N.O. v Mavjee Bhawan (Pty) Ltd
1967 (3) SA 131
(T)
at 150-152.
[30]
See para [7]-[10], above.
[31]
Although the indications on
the papers appear to support Greaves’ contention that he has
not been paid for the shares in
the manner contemplated by the
Shareholders’ Agreement, there is however some documentation
which suggests that Greaves,
Knapp and Barnard might have settled
the issue of the outstanding purchase consideration by some form of
division between themselves
of the right to the value of the
company’s goodwill.  The notion of such a division is to
my mind somewhat unconventional
and I refrain from making any
finding on whether or not it was made, or to what effect.
[32]
The respondents’
counsel submitted a draft order which provided for a referral of
various relevant outstanding issues for
the purposes of relief in
terms of s 252 for determination on oral evidence.  I have
however formulated an order which
will give the parties the
opportunity to avoid further litigation.
[33]
Cf.
Robins
v Supscaf Limited
[2006] NZHC 416
(and sub
nom.
Jenkins v Supscaf Ltd
[2006] 3 NZLR
264
), especially at para 141(b), in which
the New Zealand High Court refused to accede to the respondent
company’s submission
that it should refuse a winding up order
sought by an excluded ‘quasi partner’ shareholder and
direct instead that
the remaining shareholders buy the applicant’s
shares, citing the historical failure of the shareholders to reach
settlement
on that basis despite ample opportunity to have done so.
[34]
I gave consideration to
directing that Greaves and Knapp should acquire the shares jointly,
but decided against this course because
of possible problems with
the exigibility of such an order and because of the complication of
the unresolved issue of whether
Barnard must still pay Greaves in
part or in full for the shares acquired by him in terms of the
Shareholders’ Agreement.
[35]
See footnote 28.
[36]
Cf e.g.
Boompret
Investments (Pty) Ltd and Another v Paardekraal Concession Store
(Pty) Ltd
1990 (1) SA 347
(A)
at 353A-F.
[37]
See C.G. van der Merwe,
Sakereg
2ed at 119;
[38]
Cf. e.g.
Van
der Meulen v Greeff 1906 CTR 1090
;
Parker v Mobil Oil
of Southern Africa (Pty) Ltd
1979 (4) SA 250
(NC)
.