Manikela and Another v Modise and Another (1488/10) [2010] ZANWHC 27 (30 September 2010)

Manikela and Another v Modise and Another (1488/10) [2010] ZANWHC 27 (30 September 2010)

The court found that the business relationship between the applicants and respondents had irretrievably broken down, making it impracticable for them to continue as members of the close corporation. The requirements of section 36(1)(d) of the Close Corporation Act were satisfied, justifying the cessation of the respondents' membership. The court further held that the first applicant should acquire the respondents' interests, given her role as the initiator of the enterprise. However, due to insufficient submissions regarding the value and payment for the respondents' interests, the court postponed the matter to allow for further affidavits and argument on these issues, reserving costs.

Citation
[2010] ZANWHC 27
Parties
Applicant: Elina Khathazile Manikela; Applicant: Epignosis Training and Health Care College CC; Respondent: Hermina Moipone Modise; Respondent: Hazel Buyile Nkhodi
Court
North West High Court, Mafikeng
Jurisdiction
South Africa
Judgment Date
30 September 2010
Case Number
1488/10
Procedural Posture
Urgent Application / Extended Return Day
Outcome
Application granted in part; respondents' membership ceased; acquisition of interests ordered; further affidavits and argument required; costs reserved.
Judges
A A Landman
Legal Topics
Close Corporation Membership, Section 36 Close Corporation Act, Breakdown of Business Relationship, Fiduciary Duties, Just and Equitable Ground
Commercial and Corporate Close Corporation Membership Section 36 Close Corporation Act Breakdown of Business Relationship Fiduciary Duties Just and Equitable Ground

Case Brief

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Parties

Elina Khathazile Manikela

Applicant

Epignosis Training and Health Care College CC

Applicant

Hermina Moipone Modise

Respondent

Hazel Buyile Nkhodi

Respondent

Procedural Posture

Urgent Application / Extended Return Day

Legal Issues

  1. 1 Whether the respondents should cease to be members of the close corporation under section 36 of the Close Corporation Act.
  2. 2 Whether the breakdown in the business relationship justifies cessation of membership.
  3. 3 How the respondents' interests in the close corporation should be disposed of.

Ratio Decidendi

The court found that the business relationship between the applicants and respondents had irretrievably broken down, making it impracticable for them to continue as members of the close corporation. The requirements of section 36(1)(d) of the Close Corporation Act were satisfied, justifying the cessation of the respondents' membership. The court further held that the first applicant should acquire the respondents' interests, given her role as the initiator of the enterprise. However, due to insufficient submissions regarding the value and payment for the respondents' interests, the court postponed the matter to allow for further affidavits and argument on these issues, reserving costs.

Court Disposition

Application granted in part; respondents' membership ceased; acquisition of interests ordered; further affidavits and argument required; costs reserved.

Orders

  • The respondents' membership of the second applicant shall cease immediately.
  • The first applicant, alternating the second applicant, is ordered to acquire the respondents' interests in the second applicant.