IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL LOCAL DIVISION, DURBAN
Case number: 2025-247725
In the matter between:
RAJGOPAUL REDDY FIRST APPLICANT
LOGANATHAN REDDY SECOND APPLICANT
and
NEERMALA CHETTY FIRST RESPONDENT
SEGIE MOODLEY NO SECOND RESPONDENT
WYEBANK FUNERAL PARLOUR CC THIRD RESPONDENT
WFP BURIAL SCHEME CC FOURTH RESPONDENT
THE MASTER OF THE HIGH COURT, DURBAN FIFTH RESPONDENT
ORDER
In the result, I make the following order:
The application is dismissed with costs on scale A, the applicants are directed to pay
such costs jointly and severally, the one paying the other to be absolved.
(1) Reportable Yes/No
(2) Of interest to other Judges:
Yes/No
(3) Revised
__________ ______________
Signature Date
2
JUDGMENT
Barnard AJ
Introduction
[1] This matter arises from a family business that has once again found its way
before this court. The parties are no strangers to litigation in this forum. In earlier
proceedings, the two applicants and the first respondent stood together; they now
stand opposed. The applicants seek relief against the first respondent, their former
ally. The applicants are represented by Mr Combrink SC. Mr Tucker represents the
first respondent. There were no appearances on behalf of the second, third, fourth
and fifth respondents.
The parties
[2] Mr R Reddy, the first applicant, and Mr L Redd y, the second applicant , are
brothers. Ms N Chetty, the first respondent, is their sister. The second respondent is
Mr S Moodley, an attorney, who is cited herein as nominee officio , being the
executor of the estate of the late Dhanapalan Reddy , so appointed by the fifth
respondent, the Master of the High Court, Durban. The late Mr Reddy was the father
of the applicants and the first respondent. The third respondent is W yebank Funeral
Parlour CC, a close corporation. The fourth respondent is WFP Burial Scheme CC, a
close corporation. No relief is sought against the second, third, fourth and fifth
respondents.
The nexus with the close corporations
[3] The third respondent operates as a funeral parlour. The applicants and the first
respondent are members of the third respondent and together hold 45% of the
members’ interest, divided equally among them. At the time of his death, the late Mr
Reddy held the remaining 55% of the members’ interest, which now forms part of his
deceased estate.
3
[4] The fourth respondent is a burial scheme. It essentially performs the function of
collecting funeral policy premiums from customers of the fourth respondent who
have taken out policies issued by it to provide funeral cover. The fourth respondent is
an appointed juristic representative of Oricle Investment Services, which is a
financial service provider and carries on the business as an intermediary. The late Mr
Reddy held 60% of the members' interest in the fourth respondent . The remaining
40% is held equally between the first and second applicants.
[5] The applicants and the first respondent have been involved in the operations of
the third and fourth respondents, whose businesses are run from the same
premises. The third respondent, arranges and coordinates funerals and provides the
related services and items. These funeral services are provided to the third
respondent’s customers and to policyholders who are customers of the fourth
respondent.
The relief sought
[6] The applicants seek the following relief as set out in the notice of motion:
1.1 THAT the Applicants be, and is hereby directed to institute action against the
respondents for a declarator as to the existence of a tacit or implied agreement
between the First Respondent and the Applicants regulating the management of the
business of the Third Respondent, together with ancillary relief, within thirty (30) days
of the grant of this order;
1.2 THAT the First Respondent be and is hereby –
1.2.1 directed to repay the amount of R700 000.00 to the Fourth Respondent within 14 days
of the grant of this order;
1.2.2 interdicted from any further involvement in the management of the affairs of the Fourth
Respondent.
1.3 THAT the First Respondent be and is hereby –
1.3.1 directed, in relation to the Third Respondent, to only perform an accounting and
bookkeeping function involving debtors’ control, creditors’ control, VAT calculation, and
engagement with the Third Respondent’s auditors;
engagement with the Third Respondent’s auditors;
1.3.2 interdicted from interfering with or being involved with the functions performed by the
First and Second Applicants in the management of the business of the Third
Respondent;
4
1.4 THAT the relief set out in paragraphs 1.2 and 1.3 above operate as interim relief
pending the outcome of the action contemplated in paragraph 1.1 above;
1.5 THAT the costs of the application be borne by the First Respondent on the party and
party scale C;
[7] The first respondent concedes that she should have no further involvement in
the fourth respondent, and Mr Tucker confirmed that she has given an undertaking to
that effect. The relief sought for repayment of R 700 000 is final in nature, while the
relief limiting the first respondent’s involvement in the third respondent is sought as
an interim interdict. The first respondent opposes the final and interim relief.
Repayment of R700 000
The facts and arguments
[8] It is common cause that the first respondent withdrew R700 000 from the fourth
respondent’s bank account. In the founding affidavit, the applicant s allege that these
withdrawals were unlawful, unauthorised, and made without the consent of either of
the applicants. The withdrawals were discovered in November 2024. In her
answering affidavit, the first respondent contends that the applicants consented to
the withdrawals. She states that the money was used to develop a property owned
by her and that it was to be repaid once the property was sold. That sale has not yet
occurred. She further alleges that it was ordinary practice for her and the applicants
to borrow funds from the business . In addition, an amount of R200 000 had already
been repaid.
[9] In reply, the ap plicants admit the repayment of R200 000. Thus, they now
contend that the first respondent is liable to repay the amount of R500 000 to the
fourth respondent. Faced with the WhatsApp messages annexed to the answering
affidavit, the applicants con cede to being aware of the first respondent’s request to
withdraw R210 000. They now allege that all their dealings in relation to the
businesses were done on the WhatsApp group . Had they agreed that the R210 000
businesses were done on the WhatsApp group . Had they agreed that the R210 000
would only be due once the property is sold, this would have reflected on the group
messages. Similarly, the WhatsApp group would have reflected the other loans if
they had consented thereto. In addition, it is alleged that the applicants conducted
Deeds searches and found that the first respondent does not own any property.
5
Either her version is false, or the property ha s been sold, in which event she is
obliged to repay the amounts to the fourth respondent as the amounts would then be
due.
[10] In his heads of arguments, Mr Tucker raised the issue of locus standi . He
argued that the applicants do not have standing in seeking the relief in respect of the
repayment of money to the fourth respondent. He argued that it was the fourth
respondent who would have to seek the relief. Mr Combrink, in argument, stated that
the issue of locus standi is not properly before me as it was only raised in the heads
of argument. He added that the issue of standing is also contrary to the allegations
made by the first respondent in her answering affidavit. He referred the court to
various paragraphs in the answering affidavit where the first respondent alleges that
the withdrawals were made with the consent of either the second applicant or both
applicants – not the fourth respondent.
The law
[11] According to s 2 of the Close Corporations Act 69 of 1984 (the Act), a close
corporation is on registration a juristic person and continues , subject to the
provisions of the Act, to exist as a juristic person . A corporation has the capacity and
powers of a natural person of full capacity in so far as a juristic person is capable of
having such capacity or of exercising such powers. In Cianam Trading 104 CC v
Peters MP and Others,1 Lephoko AJ held that when a member of a close corporation
acts in her person al capacity, she is not acting on behalf of the close corporation
even though such action may benefit the close corporation. The court held that:
‘… [T]here is no reason to departing (sic) from the well -established principle that a juristic
person has its own legal personality and exists separately from its members ... ’ (Footnote
omitted.)
[12] In Juna Trading DMCC v We R the Stars Trading and Projects CC ,2 Carelse J
held that:
[12] In Juna Trading DMCC v We R the Stars Trading and Projects CC ,2 Carelse J
held that:
‘Locus standi is fundamental to due process for without it, proceedings are invalidated.
Simply put, locus standi is a matter of law and cannot be conferred or be consented to. It is
1 Cianam Trading 104 CC v Peters MP and Others [2014] ZAGPPHC 974 para 20.
2 Juna Trading DMCC v We R the Stars Trading and Projects CC [2019] ZAGPJHC 541 para 19.
6
trite that at common law, a party instituting legal proceedings must be able to show a
sufficient, personal and direct interest in the case. In Tulip Diamonds FZE v Minister of
Justice and Constitutional Development and Others the Constitutional Court held: “Standing
is an important element in determining whether a matter is properly before a court. Our law
accords generous rules for standing that permit applicants to bring lawsuits either on their
own behalf or on behalf of others. But these are not limitless. A methodical and thorough
application of the rules of standing is necessary to ensure, amongst other things that relief is
being sought by the appropriate party.”’ (Footnotes omitted.)
[13] In motion proceedings, affidavits serve a dual purpose. The affidavits act as the
pleadings in defining the issues and provide the evidence a party is relying on. A
court will decide an application on legal issues not pertinently raised in the affidavits
where it is satisfied that all the relevant facts have been canvassed in the affidavits
so that none of the parties are prejudiced. In Minister van Wet en Orde v Matshoba,3
the Appellate Division held that:
‘… [T]his Court has often held that a point of law which is not pertinently raised in an
appellant's application but arises from the proven facts may be considered by the Court and
form the basis of its judgment. However, this principle is qualified by the proviso that the
Court can only act in such a way if there is no unfairness to the respondent. In the cases,
this element is usually expressed by requiring all relevant facts to be before the Court . This
eliminates the most obvious source of possible unfair harm to the respondent. In the present
case, however, it is about a gap in the evidence. The question whether the Minister was
unfairly disadvantaged by the Court basing its judgment on this gap therefore does not
depend on whether all relevant facts were before the Court - obviously they were not - but
depend on whether all relevant facts were before the Court - obviously they were not - but
whether the Minister was called upon to fill this gap ...’ (My translation.)
[14] The relief sought for the repayment of the money and the interdictory relief in
respect of the fourth respondent are final in nature. Thus, the Plascon-Evans rule
applies.4 The relief should be granted only if the facts stated by the first respondent,
together with the admitted facts in the applicant s’ affidavit, justify the order. It is trite
that motion proceedings are not designed to resolve factual disputes, to establish
probabilities, or to determine credibility. A court is permitted to deviate from the rule
where it is convinced that no real, genuine or bona fide dispute of fact has arisen on
3 Minister van Wet en Orde v Matshoba 1990 (1) SA 280 (A) at 285E-285H.
4 Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) (Plascon-Evans) at
634D-635C.
7
the papers or where the respondent’s version is wholly fanciful and untenable. A
real, genuine and bona fide dispute of fact arises where a party has clearly and
unambiguously addressed the facts said to be disputed in its papers.
Analysis
[15] On the issue of locus standi , the applicants brought this application in their
personal capacity. In the founding affidavit, there is n o allegation made that they are
acting in their capacity as members of the fourth respondent nor is there any
allegation that they have the necessary authority to bring this application on behalf of
the fourth respondent. More importantly, it is a well -established principle of our law
that a close corporation is a juristic person capable of instituting proceedings as
such. In this matter, the applicants, in their personal capacities, are not entitled to the
relief. The relief belongs to the fourth respondent. In paragraph 1.2.1 the applicants
request an order directing the first respondent to repay the amount to the fourth
respondent and not themselves. That the applicants seek an order compelling the
first respondent to make payment to the fourth respondent reinforces my view that
the requisite locus standi to seek this relief resides exclusively with the fourth
respondent. As stated by Lephoko AJ in Cianam (supra), it matters not that the relief
claimed may benefit the close corporation.
[16] It is regrettable that the first respondent failed to raise the issue of locus standi
in the answering affidavit and only raised it in the heads of argument . Our
jurisprudence differs on whether a court can entertain the issue of locus standi if it
was not raised in the answering affidavit or the pleadings. 5 In my view, the
applicants’ lack of standing is apparent from a proper reading of the papers. The late
introduction of the lack of standing causes no incurable prejudice to the applicants. It
should have been foreseen from the outset. For these reasons, I find that the
should have been foreseen from the outset. For these reasons, I find that the
applicants did not have the required standing to ask for the relief claimed in
paragraph 1.2 of the notice of motion. However, on the assumption that I am wrong,
it is necessary to consider the merits of the relief claimed in paragraph 1.2.
5 Trustees for the Time Being of the Legacy Body Corporate v Bae Estates and Escapes (Pty) Ltd and
Another 2022 (1) SA 424 (SCA) at para 34 -36; Ndevu and Another v Westonaria South Property
Holding (Pty) Ltd t/a Westonaria South [2022] ZAGPPHC 80 at para 19; Trans Creations KZN CC v
City of Cape Town and Another [2015] ZAWCHC 32 at para 4; Arendse and Another v Communicare
NPS and Others [2024] ZAWCHC 91 at para 27-34.
8
[17] There is a factual dispute as to whether the applicants knew of, and consented
to, the withdrawals from the fourth respondent’s bank account . If the first
respondent’s version is accepted, there is also a factual dispute as to whether the
loan amounts are presently due. Applying the Plascon-Evans rule, the following
factual matrix is accepted: The first respondent withdrew various amounts from the
fourth respondent’s bank account totalling R700 000 (a withdrawal of R210 000 on
14 July 2023, two withdrawals of R100 000 on 8 April 2024, and a withdrawal of
R290 000 on 1 November 2024) . R200 000 was repaid on 31 May 2024. The
applicants knew of and consented to the withdrawal of R210 000, as reflected in the
WhatsApp conversation dated 14 July 2023. 6 Initially, this amount was to be repaid
by the end of the month. The second applicant verbally consented to the other
withdrawals. The first respondent used the funds to develop a property she owns.
Ultimately, the parties agreed that the first respondent would repay the outstanding
amount upon the sale of the property, which has not yet occurred.
[18] Mr Combrink submitted that the first respondent’s version is inconsistent and
cannot withstand scrutiny. I disagree. Her version is not so far -fetched or untenable
that it may be rejected on the papers. I agree with Mr Tucker that there is nothing
untoward about siblings involved in a family business to agree to the terms as
professed by the first respondent. It is so that the first respondent did not produce a
title deed to support her assertion that she owns a property and that it has not yet
been sold. I do not believe that this omission undermines her version . One should
not lose sight of the case the first respondent was required to answer. The applicants
contended that the withdrawals were unauthorised and made without their
knowledge. The first respondent answered that case with sufficient particularity.
knowledge. The first respondent answered that case with sufficient particularity.
There was, in my view, no need for her to do more than she did considering the
allegations contained in the founding affidavit. Had the applicants alleged in the
founding affidavit that she had breached the agreed terms of the loan agreements,
the position may have been different.
[19] In their replying affidavit, the applicants departed from their initial position that
the withdrawals were unauthorised. This shift supports the first respondent’s version,
6 Indexed bundle, Answering affidavit, annexure “C” at 08-6.
9
at least in relation to the R210 000 withdrawal. It also supports her version that
R200 000 had already been repaid to the fourth respondent. The applicants allege
that they discovered the unauthorised withdrawals in November 2024. They did not
tender an explanation why they waited more than a year before demanding
repayment. In my view, this delay is consistent with the first respondent’s version that
repayment would become due only upon the sale of her property, which has not yet
occurred.
[20] The factual dispute raised by the first respondent is real, genuine and bona
fide. It cannot be ruled wholly fanciful or untenable. The disputes of fact are
fundamental and were reasonably foreseeable – especially considering the
conceded facts in reply. Despite this, the applicants elected to persist with their
application. There was no in limine application for referral of the matter to oral
evidence and I find no reason or basis on which to do so mero motu.
Conclusion
[21] The applicants have failed to convince me that they have the necessary locus
standi to have applied for the relief in respect of the repayment of the R500 000 or
the interdictory relief as set out in paragraph 1.2.2 of the notice of motion. In addition,
they have not met the threshold required for the final relief sought . In this regard,
their application stands to be dismissed.
First respondent’s involvement in the management of the third respondent
The facts and arguments
[22] It is common cause that the applicants and the first respondent are members of
the third respondent with equal member’s interests. It is also common cause that all
three of them have been involved with the third respondent from the outset. 7 It is not
disputed that during previous proceedings in this court under case number
D3387/2022 (where the first respondent in the present matter was the third applicant,
and the third and fourth respondents were the fourth and fifth respondents
and the third and fourth respondents were the fourth and fifth respondents
respectively), the roles the applicants and the first respondent performed in the third
respondent were described as follows by the first applicant:
7 Indexed bundle, founding affidavit at 01-1 and Indexed bundle, answering affidavit at 07-10.
10
‘42. My role and that of the other Applicants in the businesses of the Fourth and Fifth
Respondents can briefly be described as follows-
42.1. I was involved in operations and the management of staff in both businesses;
42.2. the Second Applicant was involved in general customer relations and arranged
the servicing of vehicles used in the businesses;
42.3. the Third Applicant was responsible for the management of the accounts of both
businesses, managing the banking and performing functions in relation to the Fourth
and Fifth Respondents’ obligations to SARS …’8
[23] The first respondent confirms that she resided in Johannesburg from 2020 to
2025 and that she only recently relocated to Durban during October 2025. It is
common cause that during the period she resided in Johannesburg, she continued
managing the accounts of the third respondent. It is not disputed that she travelled to
Durban regularly (approximately every two weeks, for a couple of days ) as soon as
the Covid restrictions lifted, and that she would then spend time at the business.
[24] The applicants contend that they and the first respondent concluded a tacit or
implied agreement that her role in the third respondent would be confined to
accounting, while they would be responsible for the business’ operations and day-to-
day management. They aver that the agreement is evidenced by the parties having
performed those respective roles for the past five years. They also allege that it
would not have been possible for the first respondent to be involved in the
management of the business while she was residing in Johannesburg.
[25] The first respondent denies the existence of a tacit or implied agreement as
averred by the applicants. The first respondent disputes that she waived her rights to
be involved in the operational side of the business. She contends that she remained
involved in all the managerial decisions, dealt with HR issues, and had discussions
involved in all the managerial decisions, dealt with HR issues, and had discussions
about the operations of the business with her late father despite her residing in
Johannesburg. She concedes that the applicants may have taken on some of the
more day-to-day decisions after the death of her father but that she was still involved
in any major management decision.
8 Indexed bundle, replying affidavit at 10-11.
11
The issues
[26] The issue is whether the applicants have satisfied the requirements for an
interim interdict, given the factual dispute as to whether a tacit or implied agreement
existed between them and the first respondent regulating the management of the
third respondent’s business.
The law
[27] The requirements for interim relief, and the principles as set out in Webster v
Mitchell9, and qualified by Gool v Minister of Justice and Another 10, are considered
holistically in Reckitt & Colman SA (Pty) Ltd v S C Johnson & Son (SA) (Pty) Ltd,11
as follows:
‘The applicant seeks interim relief. The applicant must therefore establish:
(1) a clear right or, if not clear, that it has a prima facie right;
(2) that there is a well-grounded apprehension of irreparable harm if the interim relief is not
granted and the ultimate relief (by way of the summons issued) is eventually granted;
(3) that the balance of convenience favours the grant of an interim interdict; and
(4) that the applicant has no other satisfactory remedy.
When the applicant cannot show a clear right, and more particularly where there are
disputes of fact relevant to a determination of the issues, the Court's approach in
determining whether the applicant's right is prima facie established, though open to some
doubt, is to take the facts set out by the applicant, together with any facts set out by the
respondent which the applicant cannot dispute, and to consider whether, having regard to
the inherent probabilities, the applicant should (not could) on those facts obtain final relief at
the trial of the main action. The facts set out in contradiction by the respondent should then
be considered and if serious doubt is thrown upon the case of the applicant it cannot
succeed.’
[28] The applicants rely on the provisions of s 44(3) of the Act. Section 44(3) of the
Act provides that:
‘(3) Whether or not an association agreement exists, any other agreement, express or
‘(3) Whether or not an association agreement exists, any other agreement, express or
implied, between all the members of a corporation on any matter that may be regulated by
an association agreement shall be valid, provided that such express or implied agreement-
9 Webster v Mitchell 1948 (1) SA 1186 (W), at 1189-1190.
10 Gool v Minister of Justice and Another 1955 (2) SA 682 (C), at 682C-E.
11 Reckitt & Colman SA (Pty) Ltd v S C Johnson & Son (SA) (Pty) Ltd 1995 (1) SA 725 (T) at 729H-
730C.
12
(a) is not inconsistent with any provision of an association agreement;
(b) does not affect any person other than the corporation or a member who is a party
to it; and
(c) ceases to have any effect when any party to it ceases to be a member of the
corporation.’
[29] Section 46 of the Act provides that:
‘The following rules in respect of internal relations in a corporation shall apply in so far as
this Act or an association agreement in respect of the corporation does not provide
otherwise:
(a) Every member shall be entitled to participate in the carrying on of the business of the
corporation;
(b) subject to the provision of section 47, members shall have equal rights in regard to the
management of the business of the corporation and in regard to the power to represent the
corporation in the carrying on of its business …
(c) differences between members as to matters connected with a corporation's business
shall be decided by majority vote at a meeting of members of the corporation.’
Analysis
Prima facie right
[30] The applicants rely, inter alia, on the court order handed down in case number:
D6122/2022 to support their contention that a tacit or implied agreement existed,
allocating distinct roles to them and to the first respondent in the management of the
third respondent’s busin ess. In my view, such reliance is misplaced. The relevant
portion of the order granted by Hadebe J, and later confirmed by Ploos Van Amstel
J, provides that ‘… [T] he Applicants jointly, be and are hereby authorised to take sole
control of the management and running of the businesses of the Fourth and Fifth
Respondents.’12 Thus, this order did not allocate specific role s to any of the parties.
The order merely states that the applicants and the first respondent in the present
matter were to take control of the management of the businesses.
[31] The applicants further submit that the first respondent’s confirmation of the first
[31] The applicants further submit that the first respondent’s confirmation of the first
applicant’s affidavit in case number D3387/2022 supports their contention that she
accepted that her role in the business was confined to managing the accounts of the
12 Indexed bundle, founding affidavit, annexure “RR3” at 02-27.
13
third and fourth respondents. 13 The roles described in that founding affidavit do not
concern specific managerial functions, nor do they state that the first respondent’s
role was limited to managing the accounts. They therefore do not support the
applicant’s reliance on an implied agreement.
[32] Moreover, the facts pleaded in the founding and replying affidavits do not
support the conclusion, even prima facie, that a tacit or implied agreement existed. In
the founding affidavit , the applicants allege that they and the first respondent had
been involved in the third respondent from the outset.14 In reply, however, they deny
that the first respondent was ever involved in the management of the business. 15
This contradiction undermines their version on this issue . The applicants further
allege that, after their father’s death, the first respondent and another sibling,
Pramagamie Naicker, assumed responsibility for managing the third and fourth
respondents in accordance with the late Mr Reddy’s wishes, and that the applicants
stepped back to allow them to do so. 16 Yet, they do not explain what role the first
respondent performed during that period. The applicants have pleaded no facts that
gainsay the first respondent’s version that she was actively involved in managing the
third respondent during that period. It is therefore doubtful that she would have
relinquished that role once the applicants again became more involved in the running
of the third respondent.
[33] The first respondent’s version is that she has always been involved in managing
the business, even when she was residing in Johannesburg. She explained that she
travelled regularly to Durban and spen t time at the business, a fact that the
applicants do not dispute. She relied on a WhatsApp exchange in which the first
applicant told her to address an issue she had raised, stating that she too was
involved in operations. 17 That exchange is likewise undisputed and is inconsistent
involved in operations. 17 That exchange is likewise undisputed and is inconsistent
with the applicants’ contention that her role was confined to managing the business
accounts.
13 Indexed bundle, replying affidavit at 10-11.
14 Indexed bundle, founding affidavit at 01-18.
15 Indexed bundle, replying affidavit at 10-9 to 10-10.
16 Indexed bundle, founding affidavit at 01-20.
17 Indexed bundle, answering affidavit, annexure “E” at 08-11.
14
[34] Having regard to the inherent probabilities, I remain unconvinced that the
applicants should on those facts, obtain final relief at the trial of the main action they
intend to institute. The facts pleaded do not lend themselves to a prima facie
conclusion that the first respondent waived her rights to be involved with the
management of the third respondent. The facts do not support the applicants ’
contention that an implied agreement as referred to in s 44(3) of the Act came into
existence. The inference that she was involved in managing the third respondent is
therefore unavoidable and accords with her version.
Apprehension of irreparable harm
[35] The applicants allege that the friction between them and the first respondent
has hindered the smooth running of the third respondent’s business. They contend
that her interference with staff has created uncertainty about whose instructions the
staff should follow, and they identify several incidents in which she allegedly caused
discord with certain staff members. Those allegations remain hearsay, as no
confirmatory affidavits were obtained from the staff concerned. The first respondent
dealt with the inci dents in detail and provided comprehensive explanations, which
were not challenged in reply. On the facts before me, the applicants have not
established a well-grounded apprehension of irreparable harm.
Balance of convenience
[35] In his heads of argument, Mr Combrink states that the prejudice to the
applicants if the interim order is not granted, is that the ongoing conflict will persist ,
which adversely affects the smooth operation of the business of the third respondent.
He also argues that the first applicant does not complain of any prejudice she would
suffer should the interim relief be granted. I do not agree with this contention. The
first respondent alleges that if the interim relief is granted, it will effectively hamper
her continued involvement in the management of the third respondent. The intended
her continued involvement in the management of the third respondent. The intended
action proceedings may be delayed for years , and she would not be able to
participate in any of the operational affairs of the third respondent. In the words of Mr
Tucker she would ‘…be ousted from an entity she has been involved with for near 30
years.’
15
[36] By virtue of s 46(a) and s 46(b) of the Act, the first respondent holds a legislative
right to be involved in the management of the third respondent. The contention
advanced by the applicants that the first respondent waived her rights to be so
involved is unsupported by the facts. They have failed to meet the high threshold to
justify such a conclusion. This tips the balance of convenience in favour of the first
respondent.
No other satisfactory remedy
[37] Section 46 sets out the default rules for managing a close corporation where
there is no association agreement under s 44(1), or any agreement contemplated in
s 44(3) of the Act. The applicants therefore have a statutory remedy if interim relief is
refused. Section 46( c) of the Act provides that disputes between members
concerning the corporation’s business must be resolved by majority vote at a
meeting of the members.
Conclusion
[38] Considering the above, I find that the applicants have failed to satisfy the
requirements for interim relief. They have not established a prima facie right to
restrict the first respondent’s involvement in the management of the third respondent.
The facts do not support the existence of a tacit or implied agreement in terms of s
44(3) of the Act. They have failed to show a well -grounded apprehension of
irreparable harm. The balance of convenience favours the first respondent, who has
a statutory right to participate in the management of the third respondent, and the
applicants have an alternative statutory remedy under s 46(c) of the Act. The interim
relief sought in relation to the third respondent must therefore be refused. Lastly,
there is no reason why the costs should not follow the result.
Order
[39] In the result, I make the following order:
The application is dismissed with costs on scale A, the applicants are directed
to pay such costs jointly and severally, the one paying the other to be absolved.
________________________
16
Barnard AJ
Appearances
Counsel for the applicants: Mr Combrink SC
Instructed by: Shepstone & Wylie Attorneys
24 Richefond Circle
Ridgeside Office Part
Umhlanga Rocks
Counsel for the first respondent: Mr Tucker
Instructed by: Mohamed Hassim Attorneys
134 Silverton Road
Musgrave
Durban
Date of hearing: 23 July 2026
Date of judgment: 20 August 2026