Rabinowitz v Van Graan and Others (2012/26217) [2013] ZAGPJHC 151; 2013 (5) SA 315 (GSJ) (26 April 2013)

Rabinowitz v Van Graan and Others (2012/26217) [2013] ZAGPJHC 151; 2013 (5) SA 315 (GSJ) (26 April 2013)

The court found that the proposed amended particulars of claim set out a valid cause of action against the fifth and sixth defendants, as directors of Cool Ideas 129 (Pty) Ltd, for losses suffered by the plaintiff as a result of contraventions of sections 22(1), 214, and 218(2) of the Companies Act. The allegations were sufficiently particularised to inform the defendants of the case they must meet, and causation between the conduct and the damages was adequately pleaded. The court held that directors can be personally liable to third parties for contraventions of section 22(1) read with section 218(2), and that the objections raised by the defendants did not render the proposed amendment...

Citation
[2013] ZAGPJHC 151
Parties
Plaintiff: Arlene Anne Rabinowitz; Defendant: Johannes Frederikus Wonderlijk Van Graan; Defendant: Frank Neser; Defendant: Elzann Neser; Defendant: Jan Van Der Merwe; Defendant: Kevin Thomas Cass; Defendant: Kenneth Paul Varejes
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
26 April 2013
Case Number
2012/26217
Procedural Posture
Leave to Amend / Application for Leave to Amend Particulars of Claim
Outcome
Leave to amend granted; costs awarded against the fifth and sixth defendants.
Judges
DTvR Du Plessis
Legal Topics
Director Liability, Reckless Trading, Fraudulent Conduct, Personal Liability, Pleading Amendment, Damages Quantification
Commercial and Corporate Civil Procedure Director Liability Reckless Trading Fraudulent Conduct Personal Liability Pleading Amendment Damages Quantification

Case Brief

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Parties

Arlene Anne Rabinowitz

Plaintiff

Johannes Frederikus Wonderlijk Van Graan

Defendant

Frank Neser

Defendant

Elzann Neser

Defendant

Jan Van Der Merwe

Defendant

Kevin Thomas Cass

Defendant

Kenneth Paul Varejes

Defendant

Procedural Posture

Leave to Amend / Application for Leave to Amend Particulars of Claim

Legal Issues

  1. 1 Whether the proposed amendment to the particulars of claim sets out a valid cause of action against the fifth and sixth defendants.
  2. 2 Whether the particulars of claim adequately allege causation and damages as required by the Companies Act 71 of 2008.
  3. 3 Whether directors can be held personally liable to a third party for contraventions of section 22(1) read with section 218(2) of the Companies Act.

Ratio Decidendi

The court found that the proposed amended particulars of claim set out a valid cause of action against the fifth and sixth defendants, as directors of Cool Ideas 129 (Pty) Ltd, for losses suffered by the plaintiff as a result of contraventions of sections 22(1), 214, and 218(2) of the Companies Act. The allegations were sufficiently particularised to inform the defendants of the case they must meet, and causation between the conduct and the damages was adequately pleaded. The court held that directors can be personally liable to third parties for contraventions of section 22(1) read with section 218(2), and that the objections raised by the defendants did not render the proposed amendment...

Court Disposition

Leave to amend granted; costs awarded against the fifth and sixth defendants.

Orders

  • The applicant/plaintiff is granted leave to amend her particulars of claim in terms of the notice of intention to amend dated 23 November 2012, annexed as Annexure 'X' to the notice of motion.
  • The fifth and sixth respondents/defendants are ordered to pay the costs of the application, including the costs of two counsel.