Peel and Others v Hamon J&C Engineering (Pty) Ltd and Others (GSJ) [2012] ZAGPJHC 233; [2013] 1 All SA 603 (GSJ); 2013 (2) SA 331 (GSJ) (16 November 2012)

Peel and Others v Hamon J&C Engineering (Pty) Ltd and Others (GSJ) [2012] ZAGPJHC 233; [2013] 1 All SA 603 (GSJ); 2013 (2) SA 331 (GSJ) (16 November 2012)

The court found that the conduct of the Hamon respondents in relation to the BEE transaction was not a genuine empowerment initiative and was not properly disclosed to the applicants. This conduct was oppressive and unfairly prejudicial to the applicants, exposing them to serious business risk and reputational harm, particularly given the reliance of their business on credible BEE status for state and public contracts. The court held that section 163 of the Companies Act provides a broad remedy for such conduct, including acts by related persons, and that the applicants were entitled to sever ties with the Hamon respondents. The court rejected the arbitration defence, finding that only a...

Citation
[2012] ZAGPJHC 233
Parties
Applicant: Joseph Edward Peel (JNR); Applicant: Joseph Edward Peel (SNR); Applicant: Bonisiwe Duduzile Pandela; Applicant: Gillian Quari; Respondent: Hamon J&C Engineering (Pty) Ltd; Respondent: Hamon South Africa (Pty) Ltd; Respondent: Hamon & Cie (International SA); Respondent: Philippe Delvaux; Respondent: Shirley Chauke; Respondent: Jo van der Boorn
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
16 November 2012
Case Number
2012/00994
Procedural Posture
Civil Application / Final Judgment on Application; Referral of Quantum to Trial
Outcome
Application granted in part; operative orders issued; quantum of wasted expenditure referred to trial.
Judges
D S S Moshidi
Legal Topics
Oppression Remedy, Section 163 Companies Act, Black Economic Empowerment, Shareholder Disputes, Business Risk, Arbitration Clause
Commercial and Corporate Civil Procedure Oppression Remedy Section 163 Companies Act Black Economic Empowerment Shareholder Disputes Business Risk Arbitration Clause

Case Brief

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Parties

Joseph Edward Peel (JNR)

Applicant

Joseph Edward Peel (SNR)

Applicant

Bonisiwe Duduzile Pandela

Applicant

Gillian Quari

Applicant

Hamon J&C Engineering (Pty) Ltd

Respondent

Hamon South Africa (Pty) Ltd

Respondent

Hamon & Cie (International SA)

Respondent

Philippe Delvaux

Respondent

Shirley Chauke

Respondent

Jo van der Boorn

Respondent

Procedural Posture

Civil Application / Final Judgment on Application; Referral of Quantum to Trial

Legal Issues

  1. 1 Whether the conduct of the Hamon respondents regarding the BEE transaction was oppressive, unfairly prejudicial, or unfairly disregarded the interests of the applicants under section 163 of the Companies Act.
  2. 2 Whether the applicants are entitled to sever ties with the Hamon respondents and obtain relief as envisaged in section 163.
  3. 3 Whether the wasted expenditure should be deducted from the purchase price and how quantum should be determined.

Ratio Decidendi

The court found that the conduct of the Hamon respondents in relation to the BEE transaction was not a genuine empowerment initiative and was not properly disclosed to the applicants. This conduct was oppressive and unfairly prejudicial to the applicants, exposing them to serious business risk and reputational harm, particularly given the reliance of their business on credible BEE status for state and public contracts. The court held that section 163 of the Companies Act provides a broad remedy for such conduct, including acts by related persons, and that the applicants were entitled to sever ties with the Hamon respondents. The court rejected the arbitration defence, finding that only a...

Court Disposition

Application granted in part; operative orders issued; quantum of wasted expenditure referred to trial.

Orders

  • An order is granted in terms of prayers 1 and 4 to 8 of the notice of motion dated 12 January 2012.
  • The relief claimed in prayers 2 and 3, as amended (payment of shares and wasted expenditure), is referred to trial under section 163(2)(l) of the Companies Act.