Cloete N.O. and Others v Smith (12304/2012) [2014] ZAGPPHC 808 (16 October 2014)

Cloete N.O. and Others v Smith (12304/2012) [2014] ZAGPPHC 808 (16 October 2014)

The court found that the applicants failed to discharge the onus of proving that the payment of R5 million was made by Classic Crown to the respondent by reason only of his membership. The respondent's version, supported by bank statements, showed that the payment was made by Kruger from his personal accounts as settlement of a debt arising from the interest sale agreement, not by Classic Crown as a distribution to a member. The requirements of sections 51 and 70 of the Close Corporations Act were therefore not met. The court also found that there was no disposition without value by Classic Crown to the respondent as contemplated by section 26 of the Insolvency Act. The application was...

Citation
[2014] ZAGPPHC 808
Parties
Applicant: Cornelia Maria Cloete N.O.; Applicant: Kobus van der Westhuizen N.O.; Applicant: Mohamed Waheed Essop N.O.; Applicant: Corporate Money Managers (Pty) Ltd; Applicant: Regent Group Capital (Pty) Ltd; Applicant: Pieter Hendrik Strydom N.O.; Applicant: John Roderick Graeme Polson N.O.; Applicant: Louis Strydom N.O.; Applicant: Regent Bond Discounting (Pty) Ltd; Respondent: Quentin Rupert Smith
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
16 October 2014
Case Number
12304/2012
Procedural Posture
Civil Application / Opposed Motion for Final Relief
Outcome
Application dismissed with costs awarded against the applicants.
Judges
Prinsloo
Legal Topics
Close Corporations Act, Repayment of Member Payments, Disposition Without Value, Insolvency Act, Onus in Motion Proceedings
Commercial and Corporate Close Corporations Act Repayment of Member Payments Disposition Without Value Insolvency Act Onus in Motion Proceedings

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Parties

Cornelia Maria Cloete N.O.

Applicant

Kobus van der Westhuizen N.O.

Applicant

Mohamed Waheed Essop N.O.

Applicant

Corporate Money Managers (Pty) Ltd

Applicant

Regent Group Capital (Pty) Ltd

Applicant

Pieter Hendrik Strydom N.O.

Applicant

John Roderick Graeme Polson N.O.

Applicant

Louis Strydom N.O.

Applicant

Regent Bond Discounting (Pty) Ltd

Applicant

Quentin Rupert Smith

Respondent

Procedural Posture

Civil Application / Opposed Motion for Final Relief

Legal Issues

  1. 1 Whether the payment of R5 million to the respondent was made by Classic Crown to the respondent by reason only of his membership within the meaning of sections 51 and 70 of the Close Corporations Act.
  2. 2 Whether the payment constituted a disposition without value as contemplated by section 26 of the Insolvency Act.
  3. 3 Whether the applicants discharged the onus of proof required for final relief on motion.

Ratio Decidendi

The court found that the applicants failed to discharge the onus of proving that the payment of R5 million was made by Classic Crown to the respondent by reason only of his membership. The respondent's version, supported by bank statements, showed that the payment was made by Kruger from his personal accounts as settlement of a debt arising from the interest sale agreement, not by Classic Crown as a distribution to a member. The requirements of sections 51 and 70 of the Close Corporations Act were therefore not met. The court also found that there was no disposition without value by Classic Crown to the respondent as contemplated by section 26 of the Insolvency Act. The application was...

Court Disposition

Application dismissed with costs awarded against the applicants.

Orders

  • The application is dismissed.
  • The applicants, jointly and severally, are ordered to pay the costs.