Apco Africa (Pty) Ltd v Apco Worldwide Incorporated (372/07) [2008] ZASCA 64; [2008] 4 All SA 1 (SCA); 2008 (5) SA 615 (SCA) (29 May 2008)

Apco Africa (Pty) Ltd v Apco Worldwide Incorporated (372/07) [2008] ZASCA 64; [2008] 4 All SA 1 (SCA); 2008 (5) SA 615 (SCA) (29 May 2008)

The Supreme Court of Appeal held that the company was formed as a joint venture between Apco and Arcay, essentially in the nature of a partnership. The relationship between the shareholders had irretrievably broken down, resulting in deadlock and the disappearance of the company's substratum. The court found that Arcay's obstructionist conduct in refusing to attend meetings frustrated the deadlock-breaking mechanism in the shareholders agreement. The allegations of bad faith and ulterior motive by Apco were not supported by the evidence. The court concluded that it was just and equitable to wind up the company, as the parties could no longer cooperate or conduct business together, and...

Citation
[2008] ZASCA 64
Parties
Appellant: Apco Africa (Pty) Ltd; Appellant: Arcay Communications Holdings (Pty) Ltd; Respondent: Apco Worldwide Incorporated
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 May 2008
Case Number
372/07
Procedural Posture
Civil Appeal / Appeal From High Court Order Granting Winding Up
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Mpati, Cameron, Van Heerden, Ponnan, Snyders
Legal Topics
Just and Equitable Winding Up, Deadlock, Quasi Partnership, Shareholders Agreement, Specific Performance
Commercial and Corporate Civil Procedure Just and Equitable Winding Up Deadlock Quasi Partnership Shareholders Agreement Specific Performance

Case Brief

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Parties

Apco Africa (Pty) Ltd

Appellant

Arcay Communications Holdings (Pty) Ltd

Appellant

Apco Worldwide Incorporated

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Order Granting Winding Up

Legal Issues

  1. 1 Whether the company should be wound up on the just and equitable ground under section 344(h) of the Companies Act.
  2. 2 Whether deadlock or breakdown in shareholder relationship justifies winding up.
  3. 3 Whether the conduct of Apco precludes it from seeking winding up due to alleged unclean hands.

Ratio Decidendi

The Supreme Court of Appeal held that the company was formed as a joint venture between Apco and Arcay, essentially in the nature of a partnership. The relationship between the shareholders had irretrievably broken down, resulting in deadlock and the disappearance of the company's substratum. The court found that Arcay's obstructionist conduct in refusing to attend meetings frustrated the deadlock-breaking mechanism in the shareholders agreement. The allegations of bad faith and ulterior motive by Apco were not supported by the evidence. The court concluded that it was just and equitable to wind up the company, as the parties could no longer cooperate or conduct business together, and...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, such costs to include those consequent upon the employment of two counsel.