Lobelo and Others v Kukama and Others (38587/2011) [2013] ZAGPJHC 137 (31 May 2013)

Lobelo and Others v Kukama and Others (38587/2011) [2013] ZAGPJHC 137 (31 May 2013)

The court found that Lobelo, as director, grossly abused his position by diverting VAT refunds due to Peolwane into Diphuka's account, using company funds for personal benefit and for other entities, and failing to exercise oversight over fraudulent submissions to SARS. His conduct constituted wilful misconduct, breach of trust, and gross negligence, directly contravening sections 76(2)(a) and 77(3) of the Companies Act. The court held that section 162(5) is peremptory and required a declaration of delinquency in these circumstances. The appeal against the High Court's order was dismissed, and the application to admit further evidence on appeal by the successful respondent was rejected as...

Citation
[2013] ZAGPJHC 137
Parties
Appellant: Kagisho Lambert Lobelo; Appellant: Peolwane Properties (Pty) Ltd; Appellant: Diphuka Construction (Pty) Ltd; Respondent: Aobakwe Reginald Koketso Kukama; Respondent: Companies and Intellectual Property Commission
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
31 May 2013
Case Number
38587/2011
Procedural Posture
Civil Appeal / Appeal From High Court Order Declaring Delinquency Under Companies Act
Outcome
Appeal dismissed with costs, including costs of two counsel. Application to admit further evidence on appeal dismissed with punitive costs.
Judges
P. Blieden, C. J. Claassen, C. Jordaan
Legal Topics
Delinquent Director, Companies Act Section 162, Fiduciary Duties, Vat Refund Misappropriation, Derivative Action, Director Liability
Commercial and Corporate Civil Procedure Delinquent Director Companies Act Section 162 Fiduciary Duties Vat Refund Misappropriation Derivative Action Director Liability

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Parties

Kagisho Lambert Lobelo

Appellant

Peolwane Properties (Pty) Ltd

Appellant

Diphuka Construction (Pty) Ltd

Appellant

Aobakwe Reginald Koketso Kukama

Respondent

Companies and Intellectual Property Commission

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Order Declaring Delinquency Under Companies Act

Legal Issues

  1. 1 Whether the conduct of Lobelo as director warranted a declaration of delinquency under section 162(5) of the Companies Act.
  2. 2 Whether the diversion and misuse of VAT refunds constituted gross negligence, wilful misconduct, or breach of trust.
  3. 3 Whether the High Court was correct to grant leave for derivative actions and costs orders as it did.

Ratio Decidendi

The court found that Lobelo, as director, grossly abused his position by diverting VAT refunds due to Peolwane into Diphuka's account, using company funds for personal benefit and for other entities, and failing to exercise oversight over fraudulent submissions to SARS. His conduct constituted wilful misconduct, breach of trust, and gross negligence, directly contravening sections 76(2)(a) and 77(3) of the Companies Act. The court held that section 162(5) is peremptory and required a declaration of delinquency in these circumstances. The appeal against the High Court's order was dismissed, and the application to admit further evidence on appeal by the successful respondent was rejected as...

Court Disposition

Appeal dismissed with costs, including costs of two counsel. Application to admit further evidence on appeal dismissed with punitive costs.

Orders

  • The application to lead further evidence on appeal is dismissed with costs, including costs occasioned by the employment of two counsel and payable on attorney and own client scale.
  • The appeal is dismissed with costs, including costs occasioned by the employment of two counsel.