Rossouw and Another v Coetzee and Another (6905/09) [2011] ZAWCHC 123 (1 February 2011)

Rossouw and Another v Coetzee and Another (6905/09) [2011] ZAWCHC 123 (1 February 2011)

The court found that the respondents breached their fiduciary duties by continuing to operate competing businesses while members of the close corporation, contrary to the applicants' express instructions and the spirit of their association. This conduct deprived the corporation of profits and diminished the value of the applicants' interests. The applicants established, through uncontested facts and the referee's valuation, that the respondents' actions justified termination of membership under section 36 of the Close Corporations Act. The first respondent's membership was terminated without compensation due to the extent of his breach and the direct financial harm caused. The second...

Citation
[2011] ZAWCHC 123
Parties
Applicant: Gideon Jozua Rossouw; Applicant: Anthony Robin Kleynhans; Respondent: Bernard William Coetzee; Respondent: Inge L'Oreal Fortuin
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
1 February 2011
Case Number
6905/09
Procedural Posture
Civil Application / Final Judgment
Outcome
Application granted. Respondents' membership terminated as ordered.
Judges
Louw
Legal Topics
Termination of Membership, Fiduciary Duties, Just and Equitable Remedy, Valuation of Members Interest
Commercial and Corporate Termination of Membership Fiduciary Duties Just and Equitable Remedy Valuation of Members Interest

Case Brief

Summary, issues, holding and outcome

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Parties

Gideon Jozua Rossouw

Applicant

Anthony Robin Kleynhans

Applicant

Bernard William Coetzee

Respondent

Inge L'Oreal Fortuin

Respondent

Procedural Posture

Civil Application / Final Judgment

Legal Issues

  1. 1 Whether the respondents breached their fiduciary duties by competing with the close corporation.
  2. 2 Whether it is just and equitable to terminate the respondents' membership without compensation.
  3. 3 Whether the applicants discharged the onus to justify the orders sought under section 36 of the Close Corporations Act.

Ratio Decidendi

The court found that the respondents breached their fiduciary duties by continuing to operate competing businesses while members of the close corporation, contrary to the applicants' express instructions and the spirit of their association. This conduct deprived the corporation of profits and diminished the value of the applicants' interests. The applicants established, through uncontested facts and the referee's valuation, that the respondents' actions justified termination of membership under section 36 of the Close Corporations Act. The first respondent's membership was terminated without compensation due to the extent of his breach and the direct financial harm caused. The second...

Court Disposition

Application granted. Respondents' membership terminated as ordered.

Orders

  • The first respondent's membership in P & F Rossouw Ondernemings BK is terminated without any compensation.
  • The second respondent's membership in P & F Rossouw Ondernemings BK is terminated upon payment of R200,000.00 by the applicants.