Smith and Others v Georgiou and Others (93417/2019) [2024] ZAGPPHC 585 (6 June 2024)

Smith and Others v Georgiou and Others (93417/2019) [2024] ZAGPPHC 585 (6 June 2024)

The court held that the jurisdictional requirements under section 165(5)(a) of the Companies Act must be satisfied before the merits of the application for leave to institute derivative actions can be considered. Since these requirements were not addressed by counsel and have not been established, it is not convenient to separate the issues pertaining to Cohen from those against the other respondents. The same reasoning applies to the argument that continuation of proceedings against Cohen constitutes an abuse of process; such a determination can only be made after considering the merits. Accordingly, the application for separation of issues is dismissed, costs are reserved, and the...

Citation
[2024] ZAGPPHC 585
Parties
Applicant: Henry Arden Smith; Applicant: Andre Hanekom; Applicant: Christoffel Steyn Hoffmann; Applicant: Doreen Byram Aban van der Berg; Applicant: Adriaan de Klerk Steyn; Applicant: Judith Anne Hutchings; Applicant: Jacoba Elizabeth Strauss; Applicant: Theresa Alice Hodgetts; Applicant: Elizabeth Caryl Henrico; Applicant: Nicole Gurtschmann; Applicant: Esther Marie Rousseau; Applicant: Christina Jacoba Helena Laubscher; Respondent: Nicolas Georgiou; Respondent: Michael Georgiou; Respondent: George Nicolas Georgiou; Respondent: Johannes Frederick Klopper N.O.; Respondent: Johannes Frederick Klopper; Respondent: Cornelius Fourie Myburgh; Respondent: Panogiotis Kleovoulou; Respondent: Zephan Properties (Pty) Ltd; Respondent: Orthotouch Limited; Respondent: Orthotouch (Pty) Limited; Respondent: Nicolas Georgiou N.O.; Respondent: Maureen Lynette Georgiou N.O.; Respondent: Joseph Chemaly N.O.; Respondent: Derek Perdoe Cohen; Respondent: Highveld Syndication No 15 Limited; Respondent: Highveld Syndication No 16 Limited; Respondent: Highveld Syndication No 17 Limited; Respondent: Highveld Syndication No 18 Limited; Respondent: Highveld Syndication No 19 Limited; Respondent: Highveld Syndication No 20 Limited; Respondent: Highveld Syndication No 21 Limited; Respondent: Highveld Syndication No 22 Limited
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
6 June 2024
Case Number
93417/2019
Procedural Posture
Civil Application / Application for Separation of Issues Under Rule 33(4) and Postponement of Proceedings Against the Fourteenth Respondent
Outcome
Application for separation of issues dismissed; costs reserved; application against the fourteenth respondent postponed.
Judges
Janse Van Nieuwenhuizen
Legal Topics
Separation of Issues, Derivative Action, Business Rescue, Scheme of Arrangement, Personal Liability of Directors
Civil Procedure Commercial and Corporate Separation of Issues Derivative Action Business Rescue Scheme of Arrangement Personal Liability of Directors

Case Brief

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Parties

Henry Arden Smith

Applicant

Andre Hanekom

Applicant

Christoffel Steyn Hoffmann

Applicant

Doreen Byram Aban van der Berg

Applicant

Adriaan de Klerk Steyn

Applicant

Judith Anne Hutchings

Applicant

Jacoba Elizabeth Strauss

Applicant

Theresa Alice Hodgetts

Applicant

Elizabeth Caryl Henrico

Applicant

Nicole Gurtschmann

Applicant

Esther Marie Rousseau

Applicant

Christina Jacoba Helena Laubscher

Applicant

Nicolas Georgiou

Respondent

Michael Georgiou

Respondent

George Nicolas Georgiou

Respondent

Johannes Frederick Klopper N.O.

Respondent

Johannes Frederick Klopper

Respondent

Cornelius Fourie Myburgh

Respondent

Panogiotis Kleovoulou

Respondent

Zephan Properties (Pty) Ltd

Respondent

Orthotouch Limited

Respondent

Orthotouch (Pty) Limited

Respondent

Nicolas Georgiou N.O.

Respondent

Maureen Lynette Georgiou N.O.

Respondent

Joseph Chemaly N.O.

Respondent

Derek Perdoe Cohen

Respondent

Highveld Syndication No 15 Limited

Respondent

Highveld Syndication No 16 Limited

Respondent

Highveld Syndication No 17 Limited

Respondent

Highveld Syndication No 18 Limited

Respondent

Highveld Syndication No 19 Limited

Respondent

Highveld Syndication No 20 Limited

Respondent

Highveld Syndication No 21 Limited

Respondent

Highveld Syndication No 22 Limited

Respondent

Procedural Posture

Civil Application / Application for Separation of Issues Under Rule 33(4) and Postponement of Proceedings Against the Fourteenth Respondent

Legal Issues

  1. 1 Whether the issues pertaining to the relief claimed against the fourteenth respondent (Cohen) should be separated from those against the other respondents.
  2. 2 Whether continuation of proceedings against Cohen constitutes an abuse of process.
  3. 3 Whether the jurisdictional requirements under section 165(5) of the Companies Act 71 of 2008 have been satisfied before leave to institute derivative actions can be considered.

Ratio Decidendi

The court held that the jurisdictional requirements under section 165(5)(a) of the Companies Act must be satisfied before the merits of the application for leave to institute derivative actions can be considered. Since these requirements were not addressed by counsel and have not been established, it is not convenient to separate the issues pertaining to Cohen from those against the other respondents. The same reasoning applies to the argument that continuation of proceedings against Cohen constitutes an abuse of process; such a determination can only be made after considering the merits. Accordingly, the application for separation of issues is dismissed, costs are reserved, and the...

Court Disposition

Application for separation of issues dismissed; costs reserved; application against the fourteenth respondent postponed.

Orders

  • The application for a separation of issues in terms of rule 33(4) is dismissed.
  • Costs are reserved.