D.E and Another v C.E and Others (3991/19) [2019] ZAWCHC 142; [2020] 1 All SA 123 (WCC) (10 October 2019)

D.E and Another v C.E and Others (3991/19) [2019] ZAWCHC 142; [2020] 1 All SA 123 (WCC) (10 October 2019)

The court found that the agreement between the applicants and the first respondent was intended to transfer the parents' members' interest in the close corporation to their son, not the sale of immovable property. Therefore, the Alienation of Land Act did not apply, and the agreement was valid and binding until its cancellation by the applicants on 30 November 2018. The transfer of 50% members' interest from the first respondent to the second respondent was a valid donation inter vivos, not executory, and thus not subject to the formalities of the General Law Amendment Act. The donation was motivated by a perceived moral duty and thus constituted a remuneratory donation, not a pure...

Citation
[2019] ZAWCHC 142
Parties
Applicant: D E; Applicant: A E; Respondent: C E; Respondent: M E; Respondent: Confident International CC; Respondent: The Companies and Intellectual Property Commission
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
10 October 2019
Case Number
3991/19
Procedural Posture
Civil Application / First Instance Judgment
Outcome
Application partly granted; relief against first respondent granted, relief against second respondent refused.
Judges
P.A.L.Gamble
Legal Topics
Close Corporations Act, Donation Inter Vivos, Contract Cancellation, Remuneratory Donation, Alienation of Land Act, Matrimonial Property Act
Commercial and Corporate Civil Procedure Family and Children Close Corporations Act Donation Inter Vivos Contract Cancellation Remuneratory Donation Alienation of Land Act +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 18 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

D E

Applicant

A E

Applicant

C E

Respondent

M E

Respondent

Confident International CC

Respondent

The Companies and Intellectual Property Commission

Respondent

Procedural Posture

Civil Application / First Instance Judgment

Legal Issues

  1. 1 Whether the agreement between the applicants and the first respondent was a sale of land or a transfer of members' interest in a close corporation.
  2. 2 Whether the agreement was valid and binding, or void for non-compliance with the Alienation of Land Act.
  3. 3 Whether the transfer of 50% members' interest from the first respondent to the second respondent was valid and based on a iusta causa.

Ratio Decidendi

The court found that the agreement between the applicants and the first respondent was intended to transfer the parents' members' interest in the close corporation to their son, not the sale of immovable property. Therefore, the Alienation of Land Act did not apply, and the agreement was valid and binding until its cancellation by the applicants on 30 November 2018. The transfer of 50% members' interest from the first respondent to the second respondent was a valid donation inter vivos, not executory, and thus not subject to the formalities of the General Law Amendment Act. The donation was motivated by a perceived moral duty and thus constituted a remuneratory donation, not a pure...

Court Disposition

Application partly granted; relief against first respondent granted, relief against second respondent refused.

Orders

  • It is declared that the sale agreement entered into between the applicants and the first respondent dated 17 July 2016 was validly cancelled by the applicants on 30 November 2018.
  • The register of members held by the third respondent and the records held by the fourth respondent are to be rectified by deleting the entry of the first respondent holding 50% interest and replacing it with entries reflecting the applicants as each holding 25% membership interest.