Nkamuhayo and Another v Butler and Others (072648/2023) [2023] ZAGPPHC 728 (24 August 2023)

REPUBLIC OF SOUTH

AFRICA

IN

THE HIGH COURT OF SOUTH AFRICA GAUTENG DIVISION, PRETORIA

CASE NO: 072648/2023

DATE: 24th August 2023

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED: YES

DATE: 24 August 2023

SIGNATURE:

In the matter between:

NKAMUHAYO,

RWACUMIKA KIHURA NKUBA First Applicant

WILLIAMS,

RANDALL MERVYN Second Applicant

and

BUTLER,

HOWARD

DION First Respondent

LANCASTER GOLD MINING COMPANY (PTY) LTD Second Respondent

ROX SA MINING (PTY) LTD Third Respondent

Neutral Citation: Nkamuhayo and Another v Butler and 2 Others (079845/2023) [2023] ZAGPPHC --- (24 August 2023)

Coram: Adams J

Heard: 23 August 2023

Delivered: 24 August 2023 – This judgment was handed down electronically by circulation to the parties' representatives by email, by being uploaded to CaseLines and by release to SAFLII. The date and time for hand-down is deemed to be 09:30 on 24 August 2023.

Summary: Urgent application – suspension of other directors by Chairman – refused access to and prevented from entering the business premises of company – application for an order declaring the Chairman as a delinquent director in terms of section 162 of the Companies Act – also application for an order declaring invalid ‘precautionary suspension notices’ – case not made out to declare director delinquent – however, applicants entitled to other relief – suspension unlawful –

Applicants entitled to some relief – application granted with costs.

ORDER

(1) The ‘precautionary suspension notices’ issued against the first and the second applicants by the first respondent, purportedly on behalf of the third respondent, on 21 May 2023 be and are hereby declared to be invalid and of no force and effect.

(2) The first respondent be and is hereby interdicted from obstructing, in any way, the first and the second applicants from performing and carrying out their functions and duties as directors and employees of the third respondent.

(3) The first respondent shall pay the first and the second applicants’ costs of this urgent application.

JUDGMENT

Adams J:

[1]. The first and the second applicants are directors of the third respondent (‘Rox SA Mining’), as is the first respondent. The first applicant and the first respondent are equal shareholders (50% each) in the said company. On 21 May 2023, the first respondent sent to the first and the second applicants ‘precautionary suspension notices’ advising them that, effective immediately, they were suspended presumably as directors and/or employees of Rox SA Mining. The suspension notices bizarrely indicated that the reason for their suspension was the fact that they had both supposedly contravened the provisions of the Protection of Personal Information Act 4 of 2013 (‘the POPI Act’) in that they had discussed the salary of an employee of another company.

[2]. In this opposed urgent application, the first and the second applicants, who have since 21 May 2023 or thereabout been refused access to and prevented from entering the business premises of the third respondent, apply for an order declaring the first respondent as a delinquent director in terms of section 162 of the Companies Act 71 of 2008 (‘the Companies Act’), as well as for an order declaring invalid the aforesaid ‘precautionary suspension notices’. In the alternative, the applicants seek an order interdicting the first respondent from obstructing them in any way from carrying out their functions as employees and directors of the third respondent.

[3]. In a nutshell, the applicants’ case against the first respondent is that he should be declared a delinquent director because, so the applicants contend, he has made himself guilty of gross abuse of his position as director, intentional or grossly negligent infliction of harm on the company and gross negligence, and wilful misconduct or breach of trust in relation to the performance of his director's functions within, and duties to, the company, as envisaged by section 162(2) and (5) of the Companies Act.

[1] Myers v Abramson, 1951(3) SA 438 (C) at 455.