IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case No: 16801/2024
In the matter between:
CHRISLÉ JOOSTE Applicant
and
IGROW REAL ESTATE (PTY) LTD Respondent
Coram: Justice J Cloete
Heard: 31 October 2024
Delivered electronically: 11 November 2024
JUDGMENT
CLOETE J:
[1] This is an opposed application for the provisional winding -up of the
respondent (the main relief for a final winding -up order was abandoned at the
commencement of argument). The respondent is a private company
conducting business as an estate agency and whic h at all relevant times was
represented by Mr Jacques Fouché, who is also its sole director.
[2] In the applicant’ s founding affidavit the grounds advanced in support of the
relief sought were that: (a) the applicant is a creditor of the respondent and
thus has the necessary locus standi; (b) on 13 June 2024, the applicant,
through her attorney, made a formal demand for payment of the sum allegedly
due to her in terms of s 345(1) of the Companies Act, 1 which the respondent
failed to meet; (c) as a consequence the respondent is deemed unab le to pay
its debts in terms of s 344(f) read with s 345(1)(c) of the aforesaid Act; and
(d) it is just and equitable that the respondent be wound -up in accordance
with s 344(g) thereof.
[3] As far as the reliance on s 344(g) is concerned, the applicant a lleged the
respondent was intentionally dissipating its income by distributing it to its
shareholders and/or directors without any intention to settle her claims and/or
for that matter any other creditors’ claims against it , in circumstances where it
has no assets.
[4] Despite the unnecessary length of the applicant’s founding papers (212 pages
including annexures) the salient allegations made by her were as follows. On
28 February 2018 she concluded a written employment contract with the
respondent in terms of which she was appointed as an estate agent earning
commission based on a certain structure. This was followed by a written
addendum concluded on 18 August 2020, in wh ich she would also perform
certain management functions for the respondent and would earn
management fees, again in terms of a commission structure. As a direct result
of what she referred to as her ‘utmost disgust’ at the alleged conduct of
Mr Fouché, namely that he was utilising investors’ funds contrary to the terms
of agreements concluded between these investors and the respondent, she
resigned from her employment with effect from 31 July 2023.
1 No 61 of 1973 read with Item 9 of Schedule 5 of the Companies Act 71 of 2008.
[5] The applicant further alleged that upon termination o f her employment she
rendered invoices to the respondent ‘towards commissions due to me , some
of which were not payable as yet… these invoices remain unpaid’. After the
respondent had disputed certain of her claims she abandoned the disputed
portion, leavi ng the respondent indebted to her in an amount of
R5 088 487.63.
[6] The applicant referred to an email received from Mr Fouché on behalf of the
respondent dated 2 October 2023, in which, according to her, he ‘indicated
that payment of my commission is re fused as it wishes to set off certain
damages which related entities to the respondent have suffered, allegedly
consequential to dealings between these entities and a company of which my
husband is the controlling mind’. She annexed that email, which was
addressed to both her and her husband, Mr Gerhardt Jooste, together with
her response dated 27 October 2023.
[7] The relevant portion of Mr Fouché’s email loosely translated into English,
reads that ‘I also just want to make it very clear to you, that Ger hardt
promised me that all your commission will be rolled in as a partial contribution
to bear your 25% losses… Gerhardt as you also promised me in many
conversations, that you will accept financial responsibility for the 25% losses
in the developments. Yo u also promised that you would sell or finance the
shares in your building in Durbanville to cover the 25% losses’. Mr Jooste did
not respond to this email. Only the applicant did. Her response reads in
relevant part (again loosely translated) that ‘I have no knowledge of [those
alleged promises] … and was no party to it. So I deny any promises’. In other
words the applicant claimed that she had no knowledge of the agreement
upon which the respondent relied as having been concluded between itself
and Mr Jooste. Mr Jooste did not file any confirmatory affidavit at that stage.
[8] In the answering affidavit deposed to by Mr Fouché the following emerged.
The applicant and Mr Jooste, who are married in community of property, were
placed under final seques tration on 12 April 2016 and remain unrehabilitated
insolvents. Prior to the respondent employing the applicant, Mr Jooste took up
employment with IGrow Wealth Investments (Pty) Ltd (“I Grow Wealth”), an
associated company in the IGrow Group, in November 2016.
[9] According to Mr Fouché, Mr Jooste represented to him that he was a property
developer, ‘specialising in bringing creative property solutions and managing
the full development cycle from identifying an opportunity to handing over the
keys’. Mr Joo ste also professed to have set up a real estate development,
investment and management company which, according to him, had built up a
property fund in excess of R9 billion over a ten-year period. Mr Jooste holds a
law degree and is also an admitted attorney.
[10] At the time, IGrow Wealth was seeking to explore new property developments
and (seemingly relying on the aforesaid representations) appointed Mr Jooste
as General Manager: New Development. His employment became permanent
on 19 December 2018. At that stage, in addition to his remuneration, his
written contract of employment reflected that he would become a 25% joint
venture partner in the new property developments managed by him, with
either IGrow Property Developments (Pty) Ltd (“IGrow Prop”) or IGrow Wealth
being the other 75% joint venture partner.
[11] Mr Jooste would not be required to pay for his shares , and the percentage
split would be calculated with reference to the combined shares held by him
and IGrow Prop/IGrow Wealth in the developme nt company, and which would
be a separate special purpose vehicle development company (“SPV”) for
each new property development. Given Mr Jooste’s insolvency (and
accordingly that of the joint estate) , he asked that his 25% share be held in
Bergshoop (Pty) Ltd (“Bergshoop”), of which his son was the sole director, or
the Bergshoop Property Trust. At all times however, Mr Jooste was the actual
joint venture partner.
[12] It was further agreed that the profits/losses incurred by the SPV’s would be
combined a s opposed to being treated individually in each. According to
Mr Fouché, as time passed, it became apparent that Mr Jooste had
misrepresented his alleged experience and expertise in relation to property
developments. Besides overstating financial profit pr ojections, he was unable
to manage development teams, appointed the wrong contractors and
professionals, and failed to co-ordinate contractors and members on projects.
He was supposed to use his so -called network of suppliers, contractors,
development team s and professionals to execute on these property
developments and meet the profitable projections that he had forecast for
each development. However, he failed dismally in performing these
obligations. As a result the losses suffered in respect of the prop erty
developments which he managed were huge. In respect of 3 property
developments alone, the losses amount to R112 575 115. Purely on the basis
of being a joint venture partner, Mr Jooste’s share would be at least
R28 million. There were also losses incu rred on other developments which
are yet to be determined. In addition to the aforegoing Mr Jooste also took
over the rol e of general manager of the respondent, and was intimately
involved in its management, along with the applicant (in her case, from August
2020).
[13] Mr Fouché also alleged that in his various discussions with Mr Jooste dating
back to 2020, he would point out that the developments were showing a loss.
However, on each occasion, Mr Jooste would assure him that the losses
would be made up by the profits in the remaining developments still to be
completed. During these discussions Mr Jooste also assured Mr Fouché that
if there were indeed losses, he would make good his personal 25% joint
venture share thereof. Since Mr Jooste and the applicant were unrehabilitated
insolvents with no assets, it was agreed that his personal share of any losses
would be set off against commission earned by the applicant via the
respondent and, if necessary, Mr Jooste would sell the shares held by one of
his nominee entities which owned a commercial property in Durbanvil le, and
apply the net proceeds of such sale to make up any shortfall. In reaching this
oral agreement with Mr Jooste who was acting on behalf of the insolvent joint
estate, Mr Fouché represented IGrow Prop, IGrow Wealth and the respondent
as their sole director.
[14] The last commission claim submitted by the applicant was in respect of
management fees for the period September to November 2022, whereas the
last payment made in respect of estate agent’s commission was in May 2023
in the sum of R129 291. At that stage the quantum of the losses suffered in
the developments were not known. However, after the applicant’s departure
from the respondent at the end of July 2023, it became apparent that all the
property developments managed by Mr Jooste had resulted in a loss.
[15] Mr Fouché maintained that as at the date of deposing to his answering
affidavit, Mr Jooste had never denied the existence of that oral agreement. He
pointed out that although the applicant denied being a party thereto, she did
not deny th at Mr Jooste in fact concluded the agreement. Mr Fouché
submitted it was inconceivable that Mr Jooste would not have had the
applicant’s approval to conclude that oral agreement, given that he would
regularly make reference to the applicant’s commission as being ‘our
commission’ and issued instructions as to the manner in which prior
commissions earned by the applicant should be paid. By way of illustration, on
18 February 2023, Mr Jooste addressed an email to Mr Fouché stating that he
and the applicant wou ld rather take up a share in a unit in one of the
developments in lieu of their (not the applicant’s) commissions. The relevant
portion of that email (again loosely translated) reads ‘Your feeling was that
you would rather have your share of the commission injected for cash flow,
but that you are happy if Chrislé and I leave in our part in return for a share in
Unit 104’. The applicant also has a legal background. According to Mr
Fouché, the applicant and Mr Jooste acted in unison when attending to
matters within the IGrow Group (there is also no suggestion on the papers
that they have not continued to live as husband and wife). In short therefore,
the respondent’s defence is that in terms of a set -off agreement, the
development losses far exceed any commiss ion claims of the applicant , and
accordingly she is not a creditor of the respondent.
[16] Mr Fouché also attached the applicant’s letter of resignation dated 13 June
2023 in which, contrary to her assertions in the founding affidavit,
demonstrated that she resigned for personal family reasons and because she
---
and Mr Jooste were finding it difficult to separate their joint involvement in the
business of the IGrow Group from their personal time with each other. As the
applicant put it in that email (another loose translation) ‘…unfortunately my
and Gerhardt’s personal time is taken up only with business discussions’. This
supports Mr Fouché’s version that the applican t and Mr Jooste worked in
unison together and lends credence to the defence put up by the respondent.
To this it must be added that the allegations made by the applicant of
impropriety on the part of Mr Fouché were demonstrated to be false with
reference t o correspondence , as well as an affidavit , from two separate
attorneys refuting, in the clearest terms , allegations made by the applicant of
what had allegedly been conveyed to her attorney b y them. The applicant’s
attorney did not file any confirmatory af fidavit, or personally dispute what they
stated, and the version of those attorneys must thus be accepted.
[17] The respondent also raised certain defences of a more technical nature
pertaining to the applicant’s entitlement to her commission by virtue of her
alleged lack of compliance with various statutory and regulatory requirements
for estate agents. This was di sputed by the applicant in her replying affidavit,
with reference also to various annexures. The parties’ respective versions on
this score show that there is a material dispute of fact incapable of resolution
on the papers, and I thus leave it there.
[18] Returning to the respondent ’s set-off defence, the applicant changed tack in
her replying affidavit. According to her she was now – suddenly – able to
categorically deny the existence of the oral agreement, as was – equally
suddenly – Mr Jooste who filed a confirmatory affidavit to that effect. What is
telling is that this was the very first occasion on which they both did so,
despite: (a) the applicant’s s 345 demand of 13 June 2024 having been sent
in the full knowledge of Mr Fouché’s reliance on that a greement some 7 ½
months earlier (in his email dated 2 October 2023), and in which demand the
applicant did not address this at all; and (b) her self -professed ignorance
thereof under oath in her founding affidavit deposed to on 29 July 2024. The
irresistible conclusion is that both she and Mr Jooste have been economical
with the truth.
[19] The applicant then raised a new ground , relying on s 23(2) of the Insolvency
Act,2 pertaining to disposal of property of an insolvent estate without the
consent of its trustee which, she maintained, would thus in any event render
the oral agreement relied upon by the respondent invalid. Counsel for the
applicant who, it bears emphasis, w as briefed to argue the matter at the
11th hour and who had no part in drafting the papers or preparing heads of
argument, abandoned any reliance on s 23(2), and again I leave it there.
What is important however are the following allegations made by the applicant
(and supported by Mr Jooste) at paragraph 53 of the replying affidavit:
‘My spouse and I categorically deny the existence of any verbal
agreement inter alia stating… the use of my income and commissions
generated… to offset the pro rata losses inc urred by the SPVs that are
directly attributable to the actions and interests of Bergshoop and the
Bergshoop Trust , with my spouse acting as their representative
shareholder…’
[20] Mr Fouché had never alleged that in concluding the oral agreement Mr Jooste
represented either of the aforementioned entities. His version, as previously
stated, was that Mr Jooste represented the insolvent joint estate. The
applicant’s reason for this apparent slip -up with the truth became clear when
the respondent was granted leave to file a supplementary affidavit dealing
with the new matter raised by the applicant in her replying affidavit. The
deponent to the respondent’s supplementary affidavit was Mr Johannes Van
Vuuren who is the financial manager of the IGrow Group. With reference to
objective evidence in the form of communications from Mr Jooste as well as
invoices generated by the applicant herself: (a) all invoices for management
fees and commissions prior to the termination of the applicant’s employment
with the respo ndent on 31 July 2023 were made out, and submitted, by the
applicant and Mr Jooste to IGrow Wealth, not the respondent; and (b) IGrow
Wealth was instructed on most occasions to make payment of management
2 No 24 of 1936.
fees and commissions earned by the applicant to the bank account of
Bergshoop Investments as opposed to her personal bank account. Even as
late as 15 May 2023, approximately a month before her resignation as
employee, she submitted an invoice to IGrow Wealth as opposed to the
respondent. On Mr Van Vuuren’s calculations, 71% of the applicant’s earnings
were paid to Bergshoop Investments on the instructions of herself and/or Mr
Jooste, this being a company which, according to the applicant, would never
have been able to receive those payments as they would hav e contravened
s 23(2) of the Insolvency Act. The only response to this in the applicant’s
answering affidavit, which was also allowed, was that ‘…the manner in which I
invest my commission and/or management fees is wholly irrelevant to the
matter at hand…’ . To my mind this further demonstrates the applicant’s
capacity to play fast and loose with the true factual position.
[21] In the heads of argument filed on the applicant’ s behalf, a new point was
raised for the first time. This related to s 34(1) of the Basic Conditions of
Employment Act,3 which provides as follows:
‘(1) An employer may not make any deductions from an employee’s
remuneration unless---
(a) subject to subsection (2), the employee in writing agrees to the
deduction in respect of a debt specified in the agreement; or
(b) the deduction is required or permitted in terms of a law,
collective agreement, court order or arbitration award.’
[22] The submission in the applicant’s heads of argument was merely that ‘it is
common cause that the applicant never consented to such dedu ction in
writing, in particular unliquidated claims for damages suffered by entities
which are unrelated to the applicant’. Reliance on s 34(1) was not
foreshadowed in any of the affidavits filed by the parties, since it was not a
3 No 75 of 1997.
basis advanced by the app licant to avoid the oral agreement relied upon at
any time from 2 October 2023 until filing of her heads of argument. But in any
event, as pointed out by counsel for the respondent, deductions were
specifically contemplated in the employment contract between the applicant
and the respondent. Clause 7.5 of that employment contract, which is in
writing, provides that ‘…the employee authori ses deductions from her
commission in respect of… any other amount payable in terms of an
agreement, debt and/or loss, or damage in accordance with section 34 of the
Basic Conditions of Employment Act…’ (my emphasis).
[23] No reference at all was made by the applicant to s 34(2), but during argument
both counsel for the respondent and the court were expected by applicant’s
counsel to be drawn into an interpretative exercise of the meaning of s 34(1)
read with s 34(2), and plied with new authorities to “assist” the court in dealing
with the issue. This resulted in the respondent being taken by surprise and in
my view amounted to an impermissible attempt on the applicant’s part to plug
one of the holes in her version. I will thus not deal with this point.
[24] Yet another new point was taken by the applicant for the first time in oral
argument. This pertained to s 15(3)(b) of the Matrimonial Property Act 4 which
precludes a spouse married in community of property from receiving any
money due to the other by way of, amongst others, earnings, without that
other spouse’s consent. Again this was not foreshadowed in the applicant’s
papers and took the respondent by surprise. It was thus correctly not pursued
by counsel for the applicant with any conviction.
[25] In Hülse-Reutter v HEG Consulting Enterprises (Pty) Ltd5 the court set out the
test at provisional winding-up stage as follows:
‘I think that it is important to bear in mind exactly what it is that the
trustees have to establish in order to resist this application with
success. Apart from the fact that they dispute the applicants’ claims,
4 No 88 of 1984.
5 1998 (2) SA 208 (C) at 219E-G.
and do so bona fide , which is now common cau se, what they must
establish is no more and no less than that the grounds on which they
do so are reasonable. They do not have to establish, even on the
probabilities, that the company, under their direction, will, as a matter of
fact, succeed in any actio n which might be brought against it by the
applicants to enforce their disputed claims. They do not, in this matter,
have to prove the company’s defence in any such proceedings. All that
they have to satisfy me of is that the grounds which they advance for
their and the company’s disputing these claims are not unreasonable.’
[26] On a conspectus of the affidavit evidence before me I am persuaded that the
respondent has met this threshold and moreover that it has been bona fide in
raising its opposition to this application. That leaves the issue of costs. Given
what is contained in this judgment I am also persuaded that the respondent is
entitled to the punitive costs order which it seeks. This application has been
an abuse of the court process. I should me ntion that, in respect of the
opposed application for leave to admit the respondent’s supplementary
affidavit, and consequentially the applicant’s answering affidavit thereto, I
ordered that costs be costs in the cause. In respect of the applicant’s rule 4 7
application (i.e. security for costs), the applicant refused to accede to the
respondent’s request , as a consequence of which the respondent was
compelled to launch a formal application. It was only thereafter that the
applicant provided security. In the se circumstances there is no reason why
the costs of the rule 47 application should not follow the result.
[27] The following order is made:
1. The application is dismissed.
2. The applicant shall pay the respondent’s costs on the scale as
between attorney and client, including those incurred in respect of
the respondent's rule 47 application and any reserved costs orders.
________________
J I CLOETE
For Applicant: Adv C Fehr
Instructed by: Van Wyk Van Heerden Attorneys, Mr W Van Heerden
For Respondent: Adv T Crookes
Instructed by: Abrahams & Gross Inc., Mr B De Sousa