Price v Van Zyl and Others (ECJ 060/2005) [2004] ZAECHC 48 (2 December 2004)

Price v Van Zyl and Others (ECJ 060/2005) [2004] ZAECHC 48 (2 December 2004)

The court held that the shareholders' agreement in question is reasonably capable of being interpreted to sustain the plaintiff's averment that it was an express, implied, or tacit term of the agreement that a personal relationship of confidence and trust, similar to that existing between partners, existed among the shareholders, requiring them to act reasonably and honestly towards one another. The agreement does not expressly exclude the possibility of such a fiduciary relationship, and the substance of the relationship created by the agreement must be considered. The exception raised by the defendants, which sought to dismiss the claim on the basis that no fiduciary relationship...

Citation
[2004] ZAECHC 48
Parties
Plaintiff: Donald Harold Price; Defendant: Frederick Jacobus Van Zyl; Defendant: Gary John Phillips; Defendant: Edward Roye Alexander Wilson; Defendant: John X Safaris (Pty) Ltd
Court
High Courts - Eastern Cape
Jurisdiction
South Africa
Judgment Date
2 December 2004
Case Number
ECJ 060/2005
Procedural Posture
Exception Application / Exception to Particulars of Claim
Outcome
Exception dismissed with costs.
Judges
Plasket
Legal Topics
Shareholders Agreement, Fiduciary Duties, Minority Shareholder Remedies, Contractual Terms, Dividend Rights
Commercial and Corporate Shareholders Agreement Fiduciary Duties Minority Shareholder Remedies Contractual Terms Dividend Rights

Case Brief

Summary, issues, holding and outcome

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Parties

Donald Harold Price

Plaintiff

Frederick Jacobus Van Zyl

Defendant

Gary John Phillips

Defendant

Edward Roye Alexander Wilson

Defendant

John X Safaris (Pty) Ltd

Defendant

Procedural Posture

Exception Application / Exception to Particulars of Claim

Legal Issues

  1. 1 Does a shareholders' agreement create a fiduciary relationship between the parties to it?
  2. 2 Are the plaintiff's particulars of claim sufficient to sustain a cause of action for relief sought against the first defendant?
  3. 3 Can the plaintiff compel the first defendant to account for the affairs of the company and pay net profits to the company?

Ratio Decidendi

The court held that the shareholders' agreement in question is reasonably capable of being interpreted to sustain the plaintiff's averment that it was an express, implied, or tacit term of the agreement that a personal relationship of confidence and trust, similar to that existing between partners, existed among the shareholders, requiring them to act reasonably and honestly towards one another. The agreement does not expressly exclude the possibility of such a fiduciary relationship, and the substance of the relationship created by the agreement must be considered. The exception raised by the defendants, which sought to dismiss the claim on the basis that no fiduciary relationship...

Court Disposition

Exception dismissed with costs.

Orders

  • The exception is dismissed with costs.