REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NUMBER: 2022 /17794
DELETE WHICHEVER IS NOT APPLICABLE
1.REPORTABLE: NO
2.OF INTEREST TO OTHER JUDGES: NO
3.REVISED : NO
Judge Dippenaar
In the matter between:
RANDVEST CAPITAL INVESTMENTS (PTY) LTD FIRST EXCIPIENT
CHRISTIAAN JOZUA ESKELL KLAGSBRUN SECOND EXCIPIENT
AND
REH INVESTMENTS (PTY) LTD RESPONDENT
IN RE: REH INVE STMENTS (PTY) LTD PLAINTIFF
AND
RANDVEST CAPITAL INVESTMENTS (PTY) LTD FIRST DEFENDANT
27 JANUARY 2025
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CHRIST IAAN JOZUA ESKELL KLAGSBRUN SECOND DEFENDANT
JUDG MENT
Delivered: This judgment was handed down electronically by circulation to the parties’
legal representatives b y e-mail and uploading it onto the electronic platform .
The date and time for hand -down is deemed to be 10h00 on the 27th of
JANUARY 2025.
DIPPENAAR J:
[1] This is an opposed exception taken by the defendants , as excipients, to claims A
and B of the plaintiffs’ particulars of claim. For ease of reference, the excipients are
referred to as the defendants. The defendant’s c omplaint is that the particulars of claim
lack averments to sustain a cause of action .
[2] It is apposite to fi rst refer to certain general principles. The onus is on the excipients
to show that the pleading is excipiable.1 In order to succeed the defendants must illustrate
that upon every interpretation of the particulars of claim, no cause of action is disclosed,
If they do not, the exception ought not to be upheld .2
[3] For purposes of the present exception, a court will accept, as true, the allegations
pleaded by the plaintiff. The pleading must be read as a whole and an exception cannot
be taken to a paragraph or a part of the pleading that is not self -contained. An exc ipient
1 Sun Packaging (Pty) Ltd v Vreulink 1996 (4) S A 176 (A) at 183D -F.
2 Sanan v Eskom Holdings Ltd 2010 (6) SA 638 (GSJ) at 645D.
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must satisfy a court that it would be seriously prejudiced if the offending pleading were
allowed to stand.3
[4] The duty on the plaintiff is that the particular s of claim must contain a clear and
concise statement of the material facts upon which the plaintiff relies for its claim.4
Particulars of claim must be pleaded in an intelligible and lucid form which allows the
defendants to plead meaningfully.5
[5] Save where an exception is taken for the purpose of raising a substantive question
of law, which may have the effect of settling the dispute between the parties, an excipient
should make out a very clear, strong case before he should be allowed to succeed. An
over t echnical approach should be avoided as the purpose of an exception is to weed out
cases without legal merit.6
First exception : Claim A against first and second defendant s, jointly and severally : ‘The
plaintiff has failed to allege a basis to apply s 347( 1A) of the 1973 Companies Act. ’
[6] The plaintiff’s first claim is a damages claim founded in delict. It is based on the
wrongful and intentional launching (for strategic reasons) of a claim for winding up which,
to the knowledge of the defendants, was lacking in merit. The defendants, in causing the
meritless winding up claim to have been instituted sought to achieve the ulterior purposes
of scuppering a commercial transaction.
[7] The defendants complain that the claim relies solely on the conclusion or inference
that the winding up application launched by the first defendant was malicious, intentional
3 Living Hands (Pty) Ltd v Ditz 2013 (2) SA 368 (GSJ) at 374G; Merb (Pty) ltd v Matthews and Others
(2020/15069) [2021] ZAGPJHC 693 (16 November 2021) para 8, 10.
4 Uniform Rule 18(4) ; Trope v South African Reserve Bank 1993 (3) SA 264 A at 273A.
5 Jowell v Bramwell -Jones and Others 1998 (1) SA 836 (W) at 913 F -G.
6 Levitan v Newhaven Holiday Enterprises CC 1991 (2) SA 297 (C) at 298A.
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and vexatious. The winding up application was removed from the roll on 10 May 2022
and remains to be determined.
[8] The defendants ’ complaint is that the plaintiff alleges no basis to apply s 347(1A)
of the Companies Act7 to the defendants as the plaintiff has to allege that a court has
satisfied itself that the winding up application was an abuse of proce ss and thereafter
allowed the company to institute proceedings for damages. It was submitted that in the
absence of a court order confirming that the application was an abuse of procedure o r
malicious and vexatious and an order allowing the company to claim damages, the
plaintiff has no cause of action. It is further submitted that the court, in determining
whether an order can be made in terms of s 347(1A) , can only have regard to the parties
before the court and cannot make an order against the director of the company that
launched the application.
[9] In sum, the defen dants contend ed that it is only the court hearing the winding up
application which can make the determination and that such determination must be made
before the plaintiff can have a claim. Ancillary thereto, that such claim relates only to an
order agains t the company and not a director of such company.
[10] The parties both relied on Business Par tners Ltd v World Focus 756 CC (Business
Partners ).8 There, the issue of which court had the power to grant relief under s 347(1A)
was squarely raised in that it was a rgued that it was only the court hearing the winding
application which could do so . Mnguni J held that the jurisdictional requirements had been
met and referred the matter to trial.9
[11] According to the defend ants, it may be inferred from the wording of s 347(1A ) and
the judgment that in order to institute a claim for damages, the court must first be satisfied
that such proceedings constitute an abuse or are malicious or vexatious. The plaintiff on
7 61 of 1973
8 2015 (5) SA 525 (KZN)
9 Paras 18 -23.
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the other hand argued the contrary and emphasise d that the court held that the
jurisdictional requirements had been met.
[12] In Business Partners , World Focus had claimed damages in separate proceedings
after winding up proceedings had been concluded and an appeal court had pronounced
thereon . The facts we re different in that in the appeal regarding the winding up order, the
full court had found the application to be an abuse. There was thus a finding of abuse
when the matter came before Mnguni J in the separate proceedings . In the present
instance, it would be up to the trial court to make such a finding. I am not persuaded that
the judgment avails either of the parties as it is distinguishable on the facts. The very
issue which presently arises, is whether a finding of abus e is required to complete a cause
of action. The judgment does however confirm that the institution of separate proceedings
is not improper.
[13] Section 347(1A) of the 1973 Companies Act10 provides:
“Whenever the court is satisfied that an application for the winding up of a company is an
abuse of the court’s procedure or is malicious and vexatious, the court may allow the company
forthwith to prove any damages which it may have sustained by reason of the application and
award it such compensation as the court may deem fit.”
[14] In general, courts are reluctant to decide questions concerning the interpretation
of a contract on exception where its meaning is uncertain.11 The defendants urged the
court to conduct the interpretation exercise so as to prevent them from unnecessarily
incurring great expense to defend the trial.
10 61 of 1973 .
11 Sun Packaging , supra at 186J
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[15] The defendants submitted that it is the court which deals with the winding up
application which must make the determination and that such determination must be
made prior to the plaintiff’s cause o f action being complete.
[16] I am not persuaded that the narrow interpretation proffered by the defendant bears
scrutiny. The restrictive interpretation proffered by the defendants would limit the
application of the provision unduly in a way which is not supp orted by the text or purpose
of the provision . Adopting a unitary approach and on a purposive, contextual and linguistic
interpretation ,12 it would have unbusinesslike and oppressive consequences which would
stultify the operation of the provision if the d etermination by a court that an application is
an abuse is limited to a court hearing a winding up application. To avoid its consequences,
it would be a simple matter for such an applicant to simply withdraw the application from
the roll, leaving it to the opponent to expend unnecessary funds to have the matter
enrolled and heard and so stultifying the process.
[17] Importantly, t here is nothing in the wording of the text that limits a court to the court
that hears a winding up application. There is also no time specified in the text. The word
‘whenever ’ is broad and places no limitation on when such determination must be made.
The text further does not limit the jurisdiction of ‘the court ’ to the court hearing the winding
up application. If the Legislature intended to so limit a court’s jurisdiction, it would have
done so in express terms. Read in context, it is the court that satisfies itself that a winding
up application is an ab use or is malicious or vexatious in whatever proceedings wh ich is
before it , that may allow a party to prove any damages suffered as a result .
[18] A court determining a delictual damages claim based on an abusive winding up
application , would be required to determine whether the application was abusive to
establish w hether the relevant requirements have been met , prior to allowing a company
12 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) para 26.
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to prove its damages . The limitation sought to be inferred by the defendants, would
require a reading - in of the limitation, which is impermissible.
[19] In English law there is an est ablished category of claim where an action does lie,
namely civil proceedings which attach the credit of the person sued, as in the cases of
bankruptcy proceedings or a winding up petition against a company.13 The principle of
liability for the wrongful ins titution of vexatious proceedings or claims has been adopted
in our law. Our law recognises that a claim for delictual damages for the wrongful
institution of legal proceedings is dependent on the plaintiff proving that the defendant’s
action was motivated with malicious or improper intent.14
[20] Read as a whole and in context, the plaintiff’s claim is predicated on the averments
that the winding up proceedings were instituted with the improper intent of scuppering a
lawful commercial transaction , resulting in damages being suffered . That places the claim
within the ambit of s 347(1A).
[21] During argument, the defendants referred to Werksmans Incorporated v Praxley
Corporate Solutions (Pty) Ltd 15 in relation to the discretion afforded to a court in relation
to abu sive winding up proceedings under s 347(1A) . That reliance does not avail the
defend ants. Makume J did not find that it is only the court that hears the winding up
application that has jurisdiction to entertain a claim under s 347(1A). Practically, the
abuse argument may well be raised during the course of a winding up application.
However, that does not mean that such argument can only be raised in that forum.
[22] The defendants’ conten ded that a court, in determining whether an order can be
made in terms of s 347(1A) c ould only have regard to the parties before court (in the
13 Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 QBD 674; Gibbs v Rea [1998] AC 786;
Gregory v Portsmouth City Council [2000] 1 AC 419 .
14 Michael & Aother v Linksfiled Park Clinic (Pty) Ltd & Another 2001 (3) SA 1188 (SCA) second
judgment, (30 March 2001) para 8
15 Werksmans Inc orporated v Praxl ey Corporate Solutions (Pty) Ltd (2014/05741 ) [2015] ZAGPJHC 195,
2015] 4 ALL SA 525 ( GJ) (8 September 2015) ; 2015 (4) SA 525 (GJ) para 79.
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winding up application) and c ould not make an order ag ainst the director of the company
that launched the application as such relief was limited to the company and c ould not
pertain to the directo r. No authority was advanced in support of that submission.
[23] The submission disregards that the plaintiff ’s claim is delictual in nature and is
aimed at the joint and several liability of the first and second defendants , not only under
s 347(1), but also under common law .
[24] In my view, the exception lacks merit and must fail. The defendants have not made
out a clear case that on every possible interpretation, the claim is excipiable. Th e
defendants have further not illustrated that they suffer any prejudice.
The second exception: Claim B , alternative claim against second defendant : ‘The plaintiff
has failed to allege a basis to apply s 77(2)(a) of the 2008 Companies Act to the first
defendant where ‘no allegations of a fiduciary duty owed or breached by the defendant
are made’.
[25] The claim against the second defendant is a damages claim under s 77(2)(a) of
the 2008 Companies Act.16 It is based on his utilisation of the second defendant’s
directorship of the plaintiff to knowingly cause it harm , contrary to the provisions of
s 76(2)(a)(ii) of the Act and a failure to carry out his powers and duties in good faith, for a
proper purpose and in the best interests of the plaintiff as prescribed in ss 76(3)(a) and
(b) of the Act.
[26] The exception is aimed at paragraphs 33.1 and 33.2 of the particulars of claim.
The defendants contend ed that para 33.1 o f the particulars of claim contains no more
than the plaintiff’s opinion or conclu sions, with no material facts underlying or justifying
such conclusion. It can therefore not, in itself, disclose a cause of action or found a claim.
They submitted that p aragraph 33.2, in as much as it introduces a notion that the first
16 71 of 2008.
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defendant had ‘fai led to carry out his powers and duties in good faith and for a proper
purpose and in the best inter est of REH as prescribed by s 76(3)(a) and (b) of the 2008
Companies Act ’, lacks material allegations of fact and only contains the plaintiff’s opinions
or conclusions. It was submitted that t he plaintiff alleges no basis to apply s 77(2)(a) to
the first defendant where no allegations of a fiduciary duty owed or breached by the first
defendant are made. On that basis, it was contended that Claim B lacks essent ial
averments to sustain a cause of action.
[27] The exception is thus based on three central contentions: (i ) opinions and
conclusions are pleaded without pleading the material facts underpinning such
conclusions; (ii) the plaintiff relies on the provisions of s 76(3)(a)(b) to impose liability
against the second defendant without pleading the necessary allegatio ns of fact; and (iii)
the plaintiff alleges no basis to apply s 77(2)(a) to the first defendant where no allegations
of a fiduciary duty owed or breached by the defendant are made.
[28] Section 76(3) in relevant part provides:
‘Subject to subsections (4) and ( 5), a director of a company, when acting in that capacity, must
exercise the powers and perform the functions of director – (a) In good faith and for a proper
purpose; (b) I the best interests of the company.’
[29] Under s 77(2)(a) of the 2008 Companies Act:
‘A director of a company may be held liable in accordance with the pr inciples of the common
law relating to breach of fiduciary duty, for any loss, damages or costs sustained by the
company as a consequence of any breach by the director of a duty contemplate d in section
75, 76(2) or 76(3)(a) or (b).’
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[30] The defendants submitted that i n order to claim damages under s 77(2)(a), a
breach of s 76(3) mu st be alleged by the plaintiff.17 They contended that the plaintiff failed
to make the necessary averments in order to establish a breach of the standard of conduct
for directors as set out in s 76(3)(a) and (b) and that , absent those averments, a claim for
liability for damages under s 77(2)(a) of the Act could not succeed. The defendants relied
on Visser Sitrus (Pty) Ltd v Goede Hoop Sitrus (Pty) Ltd & Others 18 which set out the test
to be applied when determining whether a director acted in the best interests of the
company and in good faith with a proper purpose under s 76(3) of the Act. It was
submitted that no material facts are averred in the particulars of claim setting out how the
second defendant breached his statutory duties under s 76(3), nor factual averments
which allege that the second defendant’s conduct was irrational and not for a proper
cause.
[31] The p leading must be read as a whole and not certain portions thereof in isolation .
Paragraphs 33.1 and 33.2 are not self -contained and must be read together with the
averments in the remainder of the particulars of claim , including those in paragraphs 4 to
27. The winding up and the second defendant’s conduct is further pleaded in paragraph s
28 to 33. The invocation of s 76(3) was clearly prefaced upon the second defendant
‘bringing the winding up application on behalf of RCI in the circumstances set out above
and with the consequences set out above’.
[32] If the particulars of claim are read in total and in context, the plaintiff pleaded
various facts pertaining to the second defendant’s conduct and intention in support of the
averment that the second defendant, while a director of the plaintiff, did not act in good
faith and for a proper purpose and did not act in its best interests and thus in breach of
his duties under s 76(3) . The plaintiff is required to plead the facta probanda, not all the
facta probantia , which supports it.19
17 Hlum isa Investment Holdings RF Ltd & Another v Kirknis & Others 2020 (5) SA 419 (SCA) para 13.
18 Visser Sitrus (Pty) Ltd v Goede Hoop Sitrus (Pty) Ltd & Others 2014 (5) SA 179 (WCC).
19 Mc Kenzie v Farmers’ Co -operative Meat Industries Ltd 1922 AD 16 at 23.
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[33] The plaintiff’s complain t was not that the particulars of claim were vague and
embarrassing . There may well have been merit in such an exception, given the terse
terms in which the particulars of claim were cast. However, the current ex ception is that
the particulars of claim lack averments to sustain a cause of action. An overly technical
approach should be avoided. I am not persuaded that the defendants have made out a
strong, clear case that on every possible interpretation, the parti culars of claim lack
averments to sustain a cause of action . They have further not established or even alleged
prejudice.
[34] Claim B is a claim against the second defendant. No fiduciary duties owing by the
first defendant are relevant to that claim. The defendants’ complaint that the plaintiff
alleges no basis to apply s 77(2)(a) to the first defendant, thus lacks merit, as it is not the
party against whom the relief is sought. For these reasons, the second exception fails on
each of the grounds advanced and stands to be dismissed.
[35] There is no reason to deviate from the normal principle that costs follow the result.
Considering the complexities involved, the employment of senior counsel was justified .
The plaintiff did not persist with its claim for the costs of two counsel at the hearing.
[36] In the result, the following order is granted:
The first and second exceptions are dismissed with costs on Scale C, including the
costs of senior counsel.
_____________________________________
EF DIPPENAAR
JUDGE OF THE HIGH COURT
JOHANNESBURG
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HEARING
DATE OF HEARING : 15 NOVEMBER 2024
DATE OF JUDGMENT : 27 JANUARY 2025
APPEARANCES
EXCIPIENT S’ COUNSEL : Adv. AA Bas son
EXCIPIENT S ATTORNEYS : JI Van Niekerk Inc.
PLAINTIFF’ S COUNSEL : Adv. GB Rome SC
Heads of argument: GB Rome SC
and J Hoffman
PLAINTIFF ’S ATTORNEYS : Assheton -Smith Ginsberg Inc .