Bester and Others v Lebra Developments (Pty) Ltd and Others (88160/19) [2022] ZAGPPHC 211 (24 March 2022)

Bester and Others v Lebra Developments (Pty) Ltd and Others (88160/19) [2022] ZAGPPHC 211 (24 March 2022)

The court found that the respondents' conduct was unfair and not in the best interests of the minority shareholders. The exclusion of the Trust from decision-making, denial of access to financial information, and use of company funds for personal expenses constituted oppressive and unfairly prejudicial conduct under section 163 of the Companies Act. The minority shareholders were entitled to access to financial records and a fair valuation of their shares. The relationship between the parties had become irretrievable, and the just and equitable remedy was for the respondents to buy out the Trust's 10% shareholding at fair value, determined after a forensic audit. The court ordered a...

Citation
[2022] ZAGPPHC 211
Parties
Applicant: Ben Coetzee Bester; Applicant: Martinus Murray Bester N.O.; Applicant: Johannes Barend Bester N.O.; Applicant: Riaan Bester N.O.; Applicant: Ben Coetzee Bester N.O.; Respondent: Lebra Development (Pty) Ltd; Respondent: Hendrik Christoffel Botha; Respondent: Lisbeth Johanna Louisa Botha; Respondent: Gerhardus Petrus van der Westhuizen; Respondent: Magdalena Julya Geyser
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
24 March 2022
Case Number
88160/19
Procedural Posture
Review Application / First Instance Judgment
Outcome
Application granted in part; forensic audit ordered; buyout relief postponed pending audit and valuation; costs awarded to applicants.
Judges
Kooverjie
Legal Topics
Oppressive Conduct, Minority Shareholder Rights, Forensic Audit, Fair Value Buyout, Section 163 Companies Act, Director Removal
Commercial and Corporate Civil Procedure Oppressive Conduct Minority Shareholder Rights Forensic Audit Fair Value Buyout Section 163 Companies Act Director Removal

Case Brief

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Parties

Ben Coetzee Bester

Applicant

Martinus Murray Bester N.O.

Applicant

Johannes Barend Bester N.O.

Applicant

Riaan Bester N.O.

Applicant

Ben Coetzee Bester N.O.

Applicant

Lebra Development (Pty) Ltd

Respondent

Hendrik Christoffel Botha

Respondent

Lisbeth Johanna Louisa Botha

Respondent

Gerhardus Petrus van der Westhuizen

Respondent

Magdalena Julya Geyser

Respondent

Procedural Posture

Review Application / First Instance Judgment

Legal Issues

  1. 1 Whether the conduct of the respondents was oppressive, unfairly prejudicial, or unfairly disregarded the interests of the applicants under section 163 of the Companies Act.
  2. 2 Whether the minority shareholders are entitled to access to financial and management information of the company.
  3. 3 Whether the applicants are entitled to a buyout of their minority shareholding at fair value.

Ratio Decidendi

The court found that the respondents' conduct was unfair and not in the best interests of the minority shareholders. The exclusion of the Trust from decision-making, denial of access to financial information, and use of company funds for personal expenses constituted oppressive and unfairly prejudicial conduct under section 163 of the Companies Act. The minority shareholders were entitled to access to financial records and a fair valuation of their shares. The relationship between the parties had become irretrievable, and the just and equitable remedy was for the respondents to buy out the Trust's 10% shareholding at fair value, determined after a forensic audit. The court ordered a...

Court Disposition

Application granted in part; forensic audit ordered; buyout relief postponed pending audit and valuation; costs awarded to applicants.

Orders

  • Applicants to approach SAICA to nominate and appoint an independent chartered accountant with at least 10 years' experience to conduct a forensic audit of the first respondent's financial position for the financial years ending 2018 to 2020, focusing on allocation of R68,000,000.00 from the sale of Plot 181,...
  • Forensic audit to be concluded within 6 months and furnished to all parties within 10 days of completion.