Morebudi and Others v Barker and Others (A233/2022) [2025] ZAGPPHC 348 (17 March 2025)

Morebudi and Others v Barker and Others (A233/2022) [2025] ZAGPPHC 348 (17 March 2025)

The court held that parties cannot contract out of the statutory provisions of section 81(1)(d) of the Companies Act. Any clause in a shareholders' agreement or joint venture agreement that purports to oust the court's jurisdiction to order winding-up is invalid to the extent of its inconsistency with the Act. The arbitration clause does not preclude the court from adjudicating the winding-up application, especially where the dispute is legal rather than factual and the prescribed dispute resolution process is ineffective. The deadlock between directors and shareholders is complete and irreconcilable, the substratum of the company has disappeared, and the relationship of trust has been...

Citation
[2025] ZAGPPHC 348
Parties
Appellant: Sannah Sankie Morebudi; Appellant: Joseph Mabusena Morebudi; Appellant: Neo-Thando Holdings (Pty) Ltd; Respondent: Brad Barker; Respondent: Charles Luyckx; Respondent: Elliott Mobility (Pty) Ltd; Respondent: Neo Thando Elliott Mobility (Pty) Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
17 March 2025
Case Number
A233/2022
Procedural Posture
Civil Appeal / Appeal Against Dismissal of Winding Up Application
Outcome
Appeal upheld; winding-up order granted.
Judges
Basson, Mahosi, Ntuli
Legal Topics
Winding Up of Company, Deadlock Between Shareholders, Contractual Ouster of Jurisdiction, Arbitration Clause, Just and Equitable Ground, Companies Act Section 81
Commercial and Corporate Civil Procedure Winding Up of Company Deadlock Between Shareholders Contractual Ouster of Jurisdiction Arbitration Clause Just and Equitable Ground Companies Act Section 81

Case Brief

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Parties

Sannah Sankie Morebudi

Appellant

Joseph Mabusena Morebudi

Appellant

Neo-Thando Holdings (Pty) Ltd

Appellant

Brad Barker

Respondent

Charles Luyckx

Respondent

Elliott Mobility (Pty) Ltd

Respondent

Neo Thando Elliott Mobility (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal Against Dismissal of Winding Up Application

Legal Issues

  1. 1 Whether a Joint Venture Agreement can lawfully preclude a party from applying for winding-up under section 81(1)(d) of the Companies Act.
  2. 2 Whether a contractual clause ousting the court's jurisdiction to order winding-up is valid and enforceable.
  3. 3 Whether the deadlock between directors and shareholders justifies winding-up on just and equitable grounds.

Ratio Decidendi

The court held that parties cannot contract out of the statutory provisions of section 81(1)(d) of the Companies Act. Any clause in a shareholders' agreement or joint venture agreement that purports to oust the court's jurisdiction to order winding-up is invalid to the extent of its inconsistency with the Act. The arbitration clause does not preclude the court from adjudicating the winding-up application, especially where the dispute is legal rather than factual and the prescribed dispute resolution process is ineffective. The deadlock between directors and shareholders is complete and irreconcilable, the substratum of the company has disappeared, and the relationship of trust has been...

Court Disposition

Appeal upheld; winding-up order granted.

Orders

  • The appeal succeeds.
  • The order of the court a quo is replaced with an order placing Neo Thando Elliott Mobility (Pty) Ltd under winding-up in the hands of the Master of the High Court.