Electronic Mining Supplies CC v Mabelane N.O and Another (807/2015) [2018] ZAGPPHC 648 (28 February 2018)

Electronic Mining Supplies CC v Mabelane N.O and Another (807/2015) [2018] ZAGPPHC 648 (28 February 2018)

The court found that the applicant failed to establish that the deceased lawfully resigned as a member prior to her death, as there was a real dispute of fact and the evidence was insufficient. Relief sought under sections 36 and 37 of the Close Corporations Act was denied because only a member may apply for...

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Citation
[2018] ZAGPPHC 648
Parties
Applicant: Electronic Mining Supplies CC; Respondent: Hliphi Annah Mabelane N.O.; Respondent: Commission of the Companies and Intellectual Property Commission (CIPC); Respondent: Delegated Official for Deceased Estates on behalf of the Master of the High Court, Nelspruit for the District of Thabe Chweu
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
28 February 2018
Case Number
807/2015
Procedural Posture
Civil Application / Judgment After Hearing and Supplementary Affidavits
Outcome
Application for declaratory relief and removal of the deceased as member dismissed; order made for independent valuation and disposal of deceased's membership interest; matter referred to B-BBEE Commission for investigation; each party to pay own costs.
Judges
Roelofse
Legal Topics
Close Corporations Act, Membership Interest Disposal, Declaratory Relief, Fronting Practice, Broad Based Black Economic Empowerment, Valuation of Members Interest
Commercial and Corporate Civil Procedure Close Corporations Act Membership Interest Disposal Declaratory Relief Fronting Practice Broad Based Black Economic Empowerment Valuation of Members Interest

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Parties

Electronic Mining Supplies CC

Applicant

Hliphi Annah Mabelane N.O.

Respondent

Commission of the Companies and Intellectual Property Commission (CIPC)

Respondent

Delegated Official for Deceased Estates on behalf of the Master of the High Court, Nelspruit for the District of Thabe Chweu

Respondent

Procedural Posture

Civil Application / Judgment After Hearing and Supplementary Affidavits

Legal Issues

  1. 1 Whether the deceased lawfully resigned as a member of the close corporation before her death.
  2. 2 How the deceased's membership interest should be disposed of under the Close Corporations Act.
  3. 3 Whether the conduct of the applicant and Ms Lowis constitutes fronting under the Broad-Based Black Economic Empowerment Act.

Ratio Decidendi

The court found that the applicant failed to establish that the deceased lawfully resigned as a member prior to her death, as there was a real dispute of fact and the evidence was insufficient. Relief sought under sections 36 and 37 of the Close Corporations Act was denied because only a member may apply for cessation of membership, and no alternative disposition applied. The court held that the deceased's membership interest must be disposed of in accordance with section 35 of the Act, and ordered an independent valuation and sale or transfer of the interest. The court expressed serious concerns about possible fronting practices, noting that the deceased may not have received economic...

Court Disposition

Application for declaratory relief and removal of the deceased as member dismissed; order made for independent valuation and disposal of deceased's membership interest; matter referred to B-BBEE Commission for investigation; each party to pay own costs.

Orders

  • The corporation shall be valued by an independent Chartered Accountant as at the date of this order.
  • Each party shall nominate one Chartered Accountant for the valuation within five days.