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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG .
Case Number: 2 025-023556
In the matter between:
In the matter between:
LLOYD PRIESTMAN Applicant
And
FIBONACCI ASSET MANAGEMENT (PTY) LTD First Respondent
TYRONE LANCASTER HODGSON N.O. Second Respondent
CANDICE SAMANTHA GILES N.O. Third Respondent
MICHAEL FRANKS N.O. Fourth Respondent
CAPITAL LEGACY FIDUCIARY SERVICES (P TY) LTD Fifth Respondent
(1) REPORTABLE: YES / NO
(2) OF INTEREST TO OTHER JUDGES: YES/NO
(3) REVISED: YES/NO
11 April 2025 _________________________
DATE SIGNATURE
2
TYRON LANCASTER GILES Sixth Respondent
CANDICE SAMANTHA Seventh Respondent
JUDGMENT
Noko J
Introduction.
[1] The applicant instituted an urgent application on 20 March 2025 against
the respondents for an order declaring shareholder’s resolution adopted at the
shareholders’ meeting on 3 February 2025 unlawful and be set aside. The
application was set down for 11 March 2025. The respondent then served a
notice for another shareholders ’ meeting scheduled to take place on 12 March
2025 which is intended to , inter alia , set aside the impugned resolution adopted
on 3 February 2025 and also to adopt a new resolution in terms of which the applicant is removed as a director .
[2] The applicant sought to amend his notice of motion and served a
supplementary affidavit challenging the lawfulness of the second notice for failure
to comply with the Companies Act.
1 The respondents are opposing the
application.
The parties .
[3] The parties are:
3.1 The applicant is Lloyd Priestman an adult male resident at
1[…] D[…] C[…], P[…], Western Cape.
1 Companies Act 71 of 2008.
3
3.2 The first respondent is Fibonacci Assets Management ( Pty)
Ltd, (“Company”) a private company duly incorporated in terms of the
company l aws of the Republic of South Africa and having its registered
address at Blueberry Office Park, Block […] Unit 1 […], A[…] street, R[…]
P[…] R[…], Gauteng.
3.3 The second respondent is Tyrone Lancaster Hodgson N.O .
(“Hodgson”) , an adult male residing A […] T[…] C[…] E[…] K[…] G[…]
E[…], H[…], cited in his capacity as a Trustee of the Sydney Engineering
Family Trust (“Sydney Trust”) .
3.4 The third respondent is Candies Samantha Giles N.O.,
(“Giles”) an adult female resident at 5[ …] B[…] Rd, E[ …] C[…] G[…] E[…],
H[…], cited in her capacity as a trustee of the Sydney Trust.
3.5 The fourth respondent is Michael Fr anks N .O., an adult male
resident at 2[ …] M[…] C[…] D[…], C[…] G[…] E[…] , C[…], cited in his
capacity as a trustee of the Sydney Trust .
3.6 The fifth respondent is Capital Legacy Fiduciary Services
(Pty) Ltd, a company with its registered address at 5[ …] S[…] S[…], R[…]
G[…], first floor, the C[…] B[…], S[…], cited in its capacity as a trustee of
Sydney Trust and represented by Kenrick Edward Newport an adult male
residing at [ …] T[…] Avenue, M[…], Johannesburg.
3.7 The s ixth respondent is Tyrone Lancaster Hodgson, an adult
male residing A […] T[…] C[…] E[…] K[…] G[…] E[…], H[…], cited in his
capacity as a director of the first respondent.
2
2 The Applicant’s Founding Affidavit states that the fifth and sixth respondents are cited in their
personal capacities as directors of the first respondents and it is apparent from the context that in
fact it is meant to be capacities as directors and not personal capacities.
4
3.8 The seventh respondent is Candies Samantha Giles an adult
female resident at 5 […] B[…] Rd, E […] C[…] G[…] E[…], H[…], cited in
her capacity as a director of the first respondent.
Background
[4] The applicant and Hodgson established the first respondent an asset
management company . They both agreed that the applicant would hold 35%
shareholding and the remaining 65% will be held by the Sydney Trust which is represented by Hodgson as a Trustee. The board of directors was constituted by
three directors, namely, the applicant, Hodgson and Giles.
[5] The applicant was registered as a Key Individual of the company in terms
of the Financial Advisory and Intermediary Services Act
3 (“FAIS”) and was also
responsible for management of the business of the company.
[6] During May or June 2024, Hodgson conveyed to the applicant that the
relationship between them is no longer conducive for proper operation of the
company and that the applicant should consider exiting the company. The
respondent s raised the following complaints regarding the applicant, namely, that
the applicant is conducting himself in competition with the company ; he fails to
uphold his fiduciary duties ; he is accused of dereliction of his duties ; he is
illtreating, rude, disrespe ctful and abrasive to the employees of the company ; and
that he refused to report to the other directors . Subsequently an offer was
presented to the applicant by Sydney Trust for the purchase of the applicant’s
shares for the sum of R1,6 million. The offer was rejected by the applicant as he
believed that the offer was below the market value.
[7] Further exchanges between the parties regarding the sale of shares did
not bear pos itive any outcome. Having regard to the above alleged complaints
3 Financial Advisory and Intermediary Services Act 37 of 2002.
5
against the applicant the majority shareholder (Sydney Trust) took a decision that
the applicant must be removed as a director .
[8] The respondent delivered a notice of meeting of shareholder s (first notice)
and on agenda was the consideration and the adoption of the resolution for the
removal of the applicant as a director of the company . The date set for the
meeting was 3 February 2025. The meeting continued on 3 February 2025 and in attendance was the second an d third respondents on the one hand and the
applicant was represented by his attorney , Ms Gottschalk . The meeting was
chaired by Justin Course of Nourse Inc attorney s who informed the attendees
that voting would be by show of hands . The second and third respondent s cast
their vote in favour of the removal and the applicant’s proxy v oted against the
removal of the applicant as a director .
[9] The applicant sought to assai l the proceedings of the meeting and
contends that several sections of the C ompanies A ct were not complied with . The
relevant sections are, first, section 65(7) which provides that for an ordinary
resolution to be carried it must be supported by more than 50% of the voting
rights exercised on the resolution and this was not complied with. Secondly, the
director who is sought to be removed should be given an opportunity to make representation in terms of section 71(2)(b) and same was not complied with.
Thirdly, the section 63 of the Act requires that a director in this instance should
be given a 10 days ’ notice and the applicant was given 9 days’ notice. The
applicant states further that if the removal is preceded misconduct on his part as
alleged, then section s 71(3) and (4) of the Companies Act are implicated and
have not been complied with.
[10] The applicant then launched the urgent proceedings to set aside the
resolution and in retort t he respondent served opposing papers and another
notice of meeting where shareholders (second notice) would “…address the
deadlocks in vot ing at the general meeting of shareholders held on 3 February
2025. On agenda will be the setting aside of the resolution adopted on 3
February 2025 and the removal of the applicant as a director of the company . In
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reply thereto the attorney for the applicant stated that it is noted from the
respondents’ letter enclosing the notice that the intended removal is predicated
on the reasons which were previously conveyed to the applicant . The applicant
sought to amend and delivered his amended papers to challenge t he second
notice as it also contravened certain sections of the Companies Act.
Urgency
[11] I had regard to the submissions by both parties and was persuaded that
the matter deserves of the attention of the urgent court. The urgency includes the
urgency as prayed for in the amended notice of motion which was predicated by the respondent committing to set vary the resolution of 3 February 2025 and
substituting same with another resolution to remove the applicant. T he
respondent filed opposing papers in the amended notice of motion. I concluded
that t he applicant would not obtain redress in due course and no evidence was
also presented to suggest that the urgency was self -created.
Supplementary Affidavit and amendment.
[12] In view of the assertion in the new notice of the shareholders ’ meeting set
down for 12 March 2025 and the persistent infractions of the Companies Act the
applicant sought to file a supplementary affidavit now to specifically deal with the averments in the second notice of the shareholders’ meeting . The applicant
seeks that the court should interdict the applicant from holding the mee ting of 12
March 2025 to remove the applicant as a director pending delivery of the papers
for an order directing the respondent to acquire his shares. The respondent in
turn filed an answer and offer to not to proceed with the meeting and suggested
that the focus between the parties should be towards the resolution of t he main
issue between the parties , which is the agreement about the sale of shares.
[13] In view of the order made below there is no need for the amendments or
admission of further affidavit to detain this court.
7
Parties’ Submissions
[14] The applicant contended that the respondent has failed to engage with the
issues raised which relates to the infractions or non- compliance with the
provisions of the Companies Act , specifically section s 71(1), 71(3), 71(4) and
62(1)(a) read with (b). The applicant should al so be dealt with like any other
shareholder and compl iance with the provisions of section 65(4) is imperative. In
addition, the attempt to withdraw the resolution of 3 February 2025 remai ned
incomplete as the respondent wanted only to consider the voting process from by
show of hands as compared to voting on a poll . This stance did not have regard
to the requirement f or representation and the reduced period of the notice is
required in terms of section 62 of the Companies Act . To this end the applicant
submitted that a case has been made out for the relief of interdict to set aside the resolution of 3 February 2025.
[15] The applicant further submitted that by virtue of his position as a director
he is entitled to be dealt with in accordance with the Companies Act and the court
is enjoined to ensure that there is proper compliance therewith. There is also
reasonable apprehension of harm emanating from the conduct of the other
directors carrying out the business of the company to his exclusion. There is no
alternative suitable remedy that may assuage the negative impact unleashed at his good name and reputation in the business space of the company and for the
devaluation of his shareholding.
[16] The respondent on the other hand submitted that the application launched
by the applicant was premature as the CIPC records clearly showed that the applicant was not removed as a director of the first respondent. I n addition,
Sydney Trust as the majority shareholder is entitled to remove the applicant without furnishing any reason to the applicant and as such the provisions of
section 71(3) are not implicated. In addition, the applicant was being malicious
and indecisive as he wanted to remain the director of the company but at the
same time having issued a notice in ter ms of section 345 of the Companies Act
with a threat to liquidate the company .
8
[17] The respondent further disputes that the requirements for an interdict have
not been complied with and importantly contents that the applicant is aware that
there are alternative remedies including civil s uit for damages in the event his
shares are being devaluated.
[18] In retort the applicant contends that he has been de facto removed as a
co-director of the company. To factors which fortifies his stance, he argued, is
that the other directors have taken decisions without including him e.g. he was
removed as an asset consultant , he was removed as a Key Individual registered
with FAIS on behalf of the first respondent. Furthermore, a decision was taken to
engage with Alexander Forbes in his absence regarding the request for a loan to acquire his shares. The access to the company’s resources inc luding emails was
terminated. The activities by other directors without him contravenes the
provisions of section 66(1) of the Companies Act which requires that the
business of the company should be carried out by the directors.
Legal principles and analysis
[19] The requirements for final interdict are settled in our jurisprudence and
were clearly set out more than a century ago in Setlogelo
4. The applicant has to
present evidence of prima facie right even if it may be open to some doubt; that
there is imminent and irreparable harm and that there is no alternative remedy.
[20] The application is for a final interdict and such an order can only be
granted in motion proceedings if the facts stated by the respondent together with
the admitted facts in the applicant’s affidavits justify the order, and this applies irrespective of where the onus lie.
4 Setlogelo v Setlogelo 1914 AD 221.
9
[21] Removal by shareholder is correctly in terms of section 71(1) and though
the shareholders need not have reasons it was held in Pretorious5 that the
reasons must be presented which will enable the director to be able to make
representation prior the voting process takes place. In contrast it was held in
Miller6 that the removal by the directors by shareholders need be preceded by
reasons.7 The removal by the directors has to follow section 71(3) of the
Companies Act where the director is to be rem oved on the basis of , inter alia ,
negligence or dereliction of duties.
[22] The continued conduct of the respondent remains unlawful for failure to
comply with t he provisions of the Companies Act which prescribes how the
directors should be dealt with. To t his end the applicant is entitled to be dealt with
on accordance with what the companies act has prescribed, including having to
discharge his duties and making decisions at board level . The persistent conduct
threatens his entitlement and obligations imposed by the Companies Act and requires to be arrested through an interdict. The claim for damages may be
available but the question is whether same would be suitable. The inability to
quantify such quantum for damages weigh in favour of the applicant and wou ld
include indeterminable damages due to decisions which may have been taken in his absence as a director who has duties to act be discharged as contemplated in the Companies Act .
[23] The respondent ’s focus was more regarding the fact that the parties are in
agreement that the applicant should exit the company and the major shareholder should then acquire his shares. To this end there is no need to have to fight over the applicant remaining a d irector in the company as such there wa s no
aggressive or requisite engagement of the legal issues raised by the applicant in relation to the respondents’ conduct .
5 Pretorious and Another v PB Meat (Pty) Ltd and Others (15479/14) [2015] ZAWCHC 21(2 June
2015) .
6 Miller v Natmed Defence (Pty) Ltd 2022 (2) SA (GJ). The disharmony in these judgments do not
impact on the applicant’s case as there are other infractions identified by the applicant .
7 On whether sufficient information has been made available see Trinity Asset Management (Pty)
Ltd v Investec Bank Ltd 2009 (4) Sa 89 SCA
10
[24] Though it does appear that the parties are in agreement that the shares
should be acquired, this should not j ustify the directors of the first respondent
carry ing on with the business of the first respondent with the applicant ’s exclusion
unless his exclusion/ removal is predicated on the provisions of the Companies
Act. It is clear that the resolution of 3 February 2025 was not in compliance therewith and this is also fortified by the respondent conveying its plans to set
aside the said resolution. As at the time of the hearing of the application the said
resolution was still ex tant. There w ere no hurdles which would have made it
insurmountable for the respondent to withdraw the said resolution even prior
serving the opposing affidavit or even before the hearing of the application. To
this end the respondent persisted that despite the assurance of what would take place on 12 March 2025 the proceedings set down for 11 Marc h 2025 should
continue.
[25] As said out above, the claim to withdraw the resolution was a still bor ne as
the respondent became aware that even the notice for the meeting of 12 March
2025 has shortcomings as a result of the failure to comply with the requirements
of the Companies Act. In the premises it follows that the resolution of 3 March 2025 that the applicant is removed remain intact and should therefore be set aside by the court is so warranted.
[26] The respondent has repeated that the facts as stated by Edwards together
with the statements from first respondent’s business associates clearly found the
basis for the removal of t he applicant as a director. If the respondent persist that
the removal would be justified by the alleged misdemeanour (that the applicant has, inter alia , failed in his fiduciary duties and dereliction of duties) on the part of
the applicant then section 71(3) and (4) of the Companies are implicated and
failure to comply would apply a fatal blow to the respondent’s case. The
acknowledgemen t that the said resolution should be set aside is sufficient
indication that it cannot be left intact.
Conclusion .
11
[27] There is non- compliance with the provisions of the Act which is fatal to the
first resolution taken and also interdicting8 the second meeting unless complied
with section 6 5(4) of the Companies Act. The respondent s have already
conceded that the meeting which let to taking of the re solution was not properly
taken and could have been withdrawn had the meeting of the 12th March 2025 not been adjourned and being compliant. To this end the said resolution of 3 February 2025 should declared unlawful and set aside.
[28] The applicant was agg rieved by the suggested second notice of the
shareholders’ meeting hence he amended his notice of motion and had a specific
relief for that meeting to be interdicted. The respondent has made a with
prejudice offer that the meeting will not proceed which offer was not accepted by
the applicant and it was not withdrawn as at the hearing. It can safely be
assumed that the respondent would make sure that there is compliance with the provisions of the Companies Act and attend to the infractions as identified by the applicant.
Costs
[29] The general principle is that the costs should follow the costs. The
applicant has been litigating from own pockets and was compelled to approach the court by the respondents whose legal costs are settled by the company. It
would be unfair that the applicant be left out of pocket from the persisting conduct
of the respondent who could have just readily withdr awn the resolution without
8 Section 65(5) of the Companies Act provides that :
At any time before the start of the meeting at which a resolution would be considered, a
shareholder or
director who believes that the form of the resolution does not satisfy the requirements of
subsection (4) may seek left to court for an order (a) Training the company from putting. The
proposed resolution to a vote until the requirements of subsequent (4) are satisfied; and requiring
the company, or the shareholders who proposed the resolution, as the case may be, to: (i) Take
appropriate steps to alter the resolution so that it satisfies the requirements of subsection 4 and
(ii) Compensate the applicant for cost of the preceding, if successful.
12
even calling for a meeting for that purposes. To this end the contention that the
costs should be reserved is unsustainable.
[30] The applicant sought costs for two counsels and without persuasive
arguments advanced to justify two counsels costs of one counsel will be allowed.
[31] Order
1. The rules relating to forms, service, notice and time periods are
dispensed with and this application is heard as an urgent application as provided for in Rule 6(12) of the Uniform Rules of Court.
2. The shareholder resolution purportedly adopted by the
shareholders of the first respondent on 3 February 2025 removing the applicant as a director of the first respondent is set aside.
3. It is recorded that the parties agreed that the meeting of the
shareholders of the first respondent convened for 12 March 2025 for the purpose of removing the applicant as a director of the first respondent shall not proceed.
4. The second to fifth respondents, in their capacities as trustees
of the Sydney Engineering Family Trust, are jointly and severally liable for the costs of this application on scale C, including costs of one counsel.
M V NOKO
Judge of the High Court,
Gauteng Division, Johannesburg.
Date s:
Hearing: 12 March 2025
Judgment: 11 April 2025.
Appearances:
For the Applicant : C Bester and N Nchabel eng.
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Instructed by Caitlin Gottachalk Inc
For the Defendant : M Muchenje.
Instructed by Office of the State Attorney,
Johannesburg.