Mphafudi v Sentle and Others (9731/22) [2022] ZAGPPHC 649 (26 August 2022)

Mphafudi v Sentle and Others (9731/22) [2022] ZAGPPHC 649 (26 August 2022)

The court found that although related action and application proceedings were pending, the applicant's urgent application for interim relief was justified by new facts, namely his removal as director and exclusion from company affairs. The plea of lis pendens did not constitute an absolute bar, and the court exercised its discretion to hear the matter, finding that justice and the balance of convenience favoured the applicant. The applicant established a prima facie right as a director and shareholder, demonstrated irreparable harm from exclusion and prejudicial conduct, and showed no alternative remedy due to failed mediation attempts. The court held that the requirements for interim...

Citation
[2022] ZAGPPHC 649
Parties
Applicant: Phosolo Jackson Alexander Mphafudi; Respondent: Abel Ramatlhatswana Sentle; Respondent: TMNS Enterprise (Pty) Ltd; Respondent: Nchaupe Malebye; Respondent: Francina Mmapote Tlhabane; Respondent: Leburu Tebogo Jacob Mphafudi N.O.; Respondent: Motlalepule Tabea Matjila N.O.; Respondent: Mpho Kunene N.O.; Respondent: Phesolo Jackson Alexander Mphafudi N.O.; Respondent: Jan Erasmus N.O.; Respondent: Jan Erasmus Auditors; Respondent: KWR Consortium (Pty) Ltd; Respondent: Pieter Snyman Rekenmeesters; Respondent: Companies & Intellectual Property Commission
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
26 August 2022
Case Number
9731/22
Procedural Posture
Urgent Application / Interim Interdict Pending Finalization of Related Action and Motion Proceedings
Outcome
Interim relief granted pending final determination of related action proceedings.
Judges
Kooverjie
Legal Topics
Section 163 Companies Act, Oppressive Conduct, Interim Interdict, Corporate Governance, Director Removal, Lis Pendens
Commercial and Corporate Civil Procedure Section 163 Companies Act Oppressive Conduct Interim Interdict Corporate Governance Director Removal Lis Pendens

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Parties

Phosolo Jackson Alexander Mphafudi

Applicant

Abel Ramatlhatswana Sentle

Respondent

TMNS Enterprise (Pty) Ltd

Respondent

Nchaupe Malebye

Respondent

Francina Mmapote Tlhabane

Respondent

Leburu Tebogo Jacob Mphafudi N.O.

Respondent

Motlalepule Tabea Matjila N.O.

Respondent

Mpho Kunene N.O.

Respondent

Phesolo Jackson Alexander Mphafudi N.O.

Respondent

Jan Erasmus N.O.

Respondent

Jan Erasmus Auditors

Respondent

KWR Consortium (Pty) Ltd

Respondent

Pieter Snyman Rekenmeesters

Respondent

Companies & Intellectual Property Commission

Respondent

Procedural Posture

Urgent Application / Interim Interdict Pending Finalization of Related Action and Motion Proceedings

Legal Issues

  1. 1 Whether the applicant is entitled to interim relief pending finalization of related proceedings.
  2. 2 Whether the removal of the applicant as director of TMNS was oppressive and prejudicial under section 163 of the Companies Act.
  3. 3 Whether the plea of lis pendens bars the present application for interim relief.

Ratio Decidendi

The court found that although related action and application proceedings were pending, the applicant's urgent application for interim relief was justified by new facts, namely his removal as director and exclusion from company affairs. The plea of lis pendens did not constitute an absolute bar, and the court exercised its discretion to hear the matter, finding that justice and the balance of convenience favoured the applicant. The applicant established a prima facie right as a director and shareholder, demonstrated irreparable harm from exclusion and prejudicial conduct, and showed no alternative remedy due to failed mediation attempts. The court held that the requirements for interim...

Court Disposition

Interim relief granted pending final determination of related action proceedings.

Orders

  • An independent director is to be appointed to the board of TMNS Enterprises (Pty) Ltd by the shareholders, failing which the Institute of Directors South Africa is to nominate a suitable independent director.
  • The respondents must take all steps necessary to reinstate the applicant as a director.