Zeman v Quickleberge and Another (C45/2010) [2010] ZALCCT 40 (23 August 2010)

Zeman v Quickleberge and Another (C45/2010) [2010] ZALCCT 40 (23 August 2010)

The court found that Quickelberge, as the sole member of the CC, acted fraudulently and recklessly by transferring the CC's assets to a family trust immediately after an arbitration award was made against the CC in favour of Zeman. The transfer was a sham, intended to evade payment of the debt, with no real value exchanged and false guarantees provided. This conduct constituted an abuse of the CC's separate corporate personality and fell squarely within section 64(1) of the Close Corporations Act. The court held that the corporate veil should be pierced, rendering Quickelberge personally liable for the CC's debt to Zeman. Furthermore, the court held that a costs order on an attorney and...

Citation
[2010] ZALCCT 40
Parties
Applicant: Bernadette Zeman; Respondent: Anthony Charles Quickelberge; Respondent: The Railway Shed CC
Court
Labour Court Cape Town
Jurisdiction
South Africa
Judgment Date
23 August 2010
Case Number
C45/2010
Procedural Posture
Urgent Application / Unopposed Motion for Personal Liability and Costs Order
Outcome
Application granted. The corporate veil is pierced and the First Respondent is held personally liable for the debt owed by the Second Respondent to the Applicant. Costs awarded on an attorney and client scale.
Judges
Steenkamp
Legal Topics
Piercing Corporate Veil, Reckless Trading, Fraudulent Conduct, Personal Liability of Members, Unfair Dismissal, Costs Award Pro Bono
Labour Law Commercial and Corporate Piercing Corporate Veil Reckless Trading Fraudulent Conduct Personal Liability of Members Unfair Dismissal Costs Award Pro Bono

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Parties

Bernadette Zeman

Applicant

Anthony Charles Quickelberge

Respondent

The Railway Shed CC

Respondent

Procedural Posture

Urgent Application / Unopposed Motion for Personal Liability and Costs Order

Legal Issues

  1. 1 Whether the Second Respondent carried on business with intent to defraud the Applicant.
  2. 2 Whether the Second Respondent carried on business with gross negligence.
  3. 3 Whether there was a gross abuse of the Second Respondent's separate corporate personality justifying piercing the corporate veil.

Ratio Decidendi

The court found that Quickelberge, as the sole member of the CC, acted fraudulently and recklessly by transferring the CC's assets to a family trust immediately after an arbitration award was made against the CC in favour of Zeman. The transfer was a sham, intended to evade payment of the debt, with no real value exchanged and false guarantees provided. This conduct constituted an abuse of the CC's separate corporate personality and fell squarely within section 64(1) of the Close Corporations Act. The court held that the corporate veil should be pierced, rendering Quickelberge personally liable for the CC's debt to Zeman. Furthermore, the court held that a costs order on an attorney and...

Court Disposition

Application granted. The corporate veil is pierced and the First Respondent is held personally liable for the debt owed by the Second Respondent to the Applicant. Costs awarded on an attorney and client scale.

Orders

  • It is declared that the business of the Second Respondent was carried on in a manner intended to defraud the Applicant within the meaning of section 64 of the Close Corporations Act.
  • The First Respondent is personally liable for the debt owed by the Second Respondent to the Applicant.