Steenkamp v Murray (80173/2015) [2016] ZAGPPHC 1244 (21 October 2016)

Steenkamp v Murray (80173/2015) [2016] ZAGPPHC 1244 (21 October 2016)

The court found that the respondent, as a member of Wimma Wyne CC, knowingly caused the CC to use funds held on behalf of the applicant for its own operational expenses, contrary to the agency agreement and without the applicant's permission. This conduct constituted fraudulent behaviour under section 64 of the Close Corporations Act. The respondent's admissions in correspondence and under cross-examination confirmed his knowledge and participation in the misappropriation. The court rejected the respondent's prescription defence, holding that prescription only commenced when the applicant became aware of the respondent's fraudulent conduct after November 2013. The respondent's opposition...

Citation
[2016] ZAGPPHC 1244
Parties
Applicant: Jacobus Hendrik Johannes Steenkamp; Respondent: Willem Jacobus Niemand Murray
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
21 October 2016
Case Number
80173/2015
Procedural Posture
Urgent Application / First Instance Judgment
Outcome
Application granted. Respondent declared personally liable for all debts and liabilities of Wimma Wyne CC owing to applicant. Costs awarded on attorney and client scale.
Judges
G.T. Avvakoumides
Legal Topics
Close Corporations Act Section 64, Personal Liability of Members, Reckless Trading, Fraudulent Conduct, Prescription Act Section 12, Agency Relationship
Commercial and Corporate Close Corporations Act Section 64 Personal Liability of Members Reckless Trading Fraudulent Conduct Prescription Act Section 12 Agency Relationship

Case Brief

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Parties

Jacobus Hendrik Johannes Steenkamp

Applicant

Willem Jacobus Niemand Murray

Respondent

Procedural Posture

Urgent Application / First Instance Judgment

Legal Issues

  1. 1 Whether the respondent is personally liable for the debts and liabilities of Wimma Wyne CC under section 64 of the Close Corporations Act.
  2. 2 Whether the respondent carried on the business of the CC recklessly or fraudulently.
  3. 3 Whether the applicant's claim against the respondent has prescribed under the Prescription Act.

Ratio Decidendi

The court found that the respondent, as a member of Wimma Wyne CC, knowingly caused the CC to use funds held on behalf of the applicant for its own operational expenses, contrary to the agency agreement and without the applicant's permission. This conduct constituted fraudulent behaviour under section 64 of the Close Corporations Act. The respondent's admissions in correspondence and under cross-examination confirmed his knowledge and participation in the misappropriation. The court rejected the respondent's prescription defence, holding that prescription only commenced when the applicant became aware of the respondent's fraudulent conduct after November 2013. The respondent's opposition...

Court Disposition

Application granted. Respondent declared personally liable for all debts and liabilities of Wimma Wyne CC owing to applicant. Costs awarded on attorney and client scale.

Orders

  • The respondent is declared to be personally liable for all and any debts and other liabilities of Wimma Wyne CC (in liquidation) owing to applicant.
  • The respondent is ordered to pay applicant's costs on a scale as between attorney and client.