Drillcon (Pty) Ltd v Soden (88615/2014) [2015] ZAGPPHC 944 (7 July 2015)

Drillcon (Pty) Ltd v Soden (88615/2014) [2015] ZAGPPHC 944 (7 July 2015)

The court held that liability under section 424(1) of the Companies Act 61 of 1973 is not automatic and requires a prior declaratory order following a factual inquiry into the conduct of the director. The plaintiff's claim against the defendant is not a liquidated amount in money as contemplated by Rule 32(1) of the Uniform Rules, since no declaration of liability has yet been made against the defendant. Without such a declaration, the judgment against Olympic Park cannot be attributed to the defendant, and summary judgment is not competent. The application for summary judgment must therefore fail.

Citation
[2015] ZAGPPHC 944
Parties
Plaintiff: Drillcon (Pty) Ltd; Defendant: Graham Kevin Soden
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
7 July 2015
Case Number
88615/2014
Procedural Posture
Summary Judgment Application / Application for Summary Judgment Opposed; Judgment Delivered After Oral Argument.
Outcome
Summary judgment application dismissed with costs; defendant granted leave to defend.
Judges
K LA M Manamela
Legal Topics
Reckless Trading, Personal Liability of Directors, Summary Judgment, Liquidated Claim, Section 424 Companies Act
Commercial and Corporate Civil Procedure Reckless Trading Personal Liability of Directors Summary Judgment Liquidated Claim Section 424 Companies Act

Case Brief

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Parties

Drillcon (Pty) Ltd

Plaintiff

Graham Kevin Soden

Defendant

Procedural Posture

Summary Judgment Application / Application for Summary Judgment Opposed; Judgment Delivered After Oral Argument.

Legal Issues

  1. 1 Whether a claim under section 424(1) of the Companies Act 61 of 1973 is capable of summary judgment.
  2. 2 Whether the plaintiff's claim against the defendant is a liquidated amount in money as contemplated by Rule 32 of the Uniform Rules.
  3. 3 Whether liability under section 424(1) can be attributed to the defendant prior to a declaratory order.

Ratio Decidendi

The court held that liability under section 424(1) of the Companies Act 61 of 1973 is not automatic and requires a prior declaratory order following a factual inquiry into the conduct of the director. The plaintiff's claim against the defendant is not a liquidated amount in money as contemplated by Rule 32(1) of the Uniform Rules, since no declaration of liability has yet been made against the defendant. Without such a declaration, the judgment against Olympic Park cannot be attributed to the defendant, and summary judgment is not competent. The application for summary judgment must therefore fail.

Court Disposition

Summary judgment application dismissed with costs; defendant granted leave to defend.

Orders

  • The summary judgment application is dismissed with costs on a party and party scale.
  • The defendant/respondent is granted leave to defend the action.