Van Tonder and Another v Lawjon Eiendomme Orkney CC and Another (26221/13) [2014] ZAGPPHC 705 (12 September 2014)

Van Tonder and Another v Lawjon Eiendomme Orkney CC and Another (26221/13) [2014] ZAGPPHC 705 (12 September 2014)

The court found that the deadlock between the members of the close corporation was unbreakable and prejudicial to its interests, preventing the business from being conducted to the advantage of the members. Attempts to resolve the impasse failed, and the acrimony between the parties made alternative remedies, such as an order for purchase of interests under section 49 of the Close Corporations Act, impractical due to disputes over valuation. The only appropriate remedy was to grant a provisional winding-up order on just and equitable grounds under section 81 of the Companies Act. Costs were ordered to be costs in the winding-up.

Citation
[2014] ZAGPPHC 705
Parties
Applicant: Anine Van Tonder; Applicant: Agostino De Villiers; Respondent: Lawjon Eiendomme Orkney CC; Respondent: Nicolaas Johannes Christoffel Le Roux
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
12 September 2014
Case Number
26221/13
Procedural Posture
Urgent Application / Application for Provisional Winding Up Order
Outcome
Provisional winding-up order granted; costs to be costs in the winding-up.
Judges
R M Keightley
Legal Topics
Winding Up of Close Corporation, Deadlock Between Members, Just and Equitable Ground, Unfairly Prejudicial Conduct, Section 81 Companies Act, Section 49 Close Corporations Act
Commercial and Corporate Winding Up of Close Corporation Deadlock Between Members Just and Equitable Ground Unfairly Prejudicial Conduct Section 81 Companies Act Section 49 Close Corporations Act

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Parties

Anine Van Tonder

Applicant

Agostino De Villiers

Applicant

Lawjon Eiendomme Orkney CC

Respondent

Nicolaas Johannes Christoffel Le Roux

Respondent

Procedural Posture

Urgent Application / Application for Provisional Winding Up Order

Legal Issues

  1. 1 Whether the deadlock between members of the close corporation justifies a winding-up order.
  2. 2 Whether it is just and equitable to grant a provisional winding-up order under section 81 of the Companies Act.
  3. 3 Whether an order under section 49 of the Close Corporations Act for purchase of members' interests is appropriate.

Ratio Decidendi

The court found that the deadlock between the members of the close corporation was unbreakable and prejudicial to its interests, preventing the business from being conducted to the advantage of the members. Attempts to resolve the impasse failed, and the acrimony between the parties made alternative remedies, such as an order for purchase of interests under section 49 of the Close Corporations Act, impractical due to disputes over valuation. The only appropriate remedy was to grant a provisional winding-up order on just and equitable grounds under section 81 of the Companies Act. Costs were ordered to be costs in the winding-up.

Court Disposition

Provisional winding-up order granted; costs to be costs in the winding-up.

Orders

  • The First Respondent is placed under a provisional winding-up order in the hands of the Master of this Court.
  • A rule nisi is issued calling upon the respondents and all other interested parties to furnish reasons, if any, to the above Honourable Court on 29 October 2014 at 10H00 or so soon thereafter as the matter may be heard as to why a final winding-up order should not be granted.