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/SG

IN THE HIGH COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

DATE: 16/08/2007

CASE NO: 9568/2007

REPORTABLE

In the matter between:

HENRY LEONARD LEIGH APPLICANT

And

LEILOU MINING SUPPLIES CC 1^ST RESPONDENT

(Registration Number: CK1998/058660/23)

STEPHEN KOTZÉ 2^ND RESPONDENT

JUDGMENT

MOLOPA, J

The applicant has brought an application for the cessation of his membership in first respondent in terms of section 36(1) of the Close Corporation Act 69 of 1984 (“The Act”), further, that the member’s interest be acquired by the second respondent for a consideration to be determined by this honourable court.

In the alternative the applicant seeks an order for the liquidation of the first respondent in terms of section 68(d) of the Act on the grounds that a deadlock has arisen between himself and the second respondent and that it would be just and equitable that the first respondent be wound up.

It is common cause between the parties that the business and trust relationship between the applicant and the second respondent has broken down irretrievably that it is not possible for the parties to continue working together as co-members of the first respondent.

The second respondent also wants the applicant to cease to be a member of the first respondent. However, on the papers filed the second respondent refuses to offer payment of any kind to the applicant in consideration of applicant’s member’s interest in the first respondent. The second respondent rather now seeks that the first respondent be wound up. Initially he wanted the application to be dismissed with costs.

Initially the applicant, in the papers filed sought payment of R563 382.68 by the second respondent in respect of the member’s interest he enjoys in the first respondent. The second respondent disputed this amount and stated in his answering affidavit that at least the applicant’s loan account amounts to R119 335.00. In presenting applicant’s case during argument applicant’s counsel indicated that the applicant was prepared to accept the amount of R119 335.00 as consideration for his member’s interest in the first respondent.

It is clear on the papers filed, also on the second respondent’s own version that the applicant’s loan account stands at R119 335.00. The second respondent alleges that since his other company African Executive Imports and Exports, has paid some debts in respect of the first respondent, the applicant cannot be entitled to payment of any monies in consideration of his member’s interest in the first respondent since there has to be a set off of the monies paid by African Executive Imports and Exports on behalf of the first respondent.

There is a bulk of copies of cheques attached to the second respondent’s answering affidavit which were allegedly paid to the applicant and/or on behalf of the first respondent by second respondent’s wife trading as African Executive Imports and Exports. These cheques are dated from around 2003 which is, on the papers, the year applicant first sold 50% of the member’s interest in the first respondent to the second respondent. Copies of cheques annexed to the second respondent’s answering affidavit do not show for what purposes these cheques were paid to the applicant and/or for the first respondent. These cheques may have been paid amongst others in consideration of the 50% sold to the second respondent in the first respondent. In fact notes to one of the cheque indicates that the cheques was paid as a deposit for a BMW, one indicates that it was payment for transport for braais. See in this regard copy of cheque no 365 dated 9 October 2003 (p118) and cheque no 448 dated 27 August 2004 (p117). Looking at these cheques it is clear that there may be a deliberate attempt on the part of the second respondent to mislead this court. The second respondent may in fact be doing this to create a dispute on the papers so that he could avoid to pay the applicant any monies in consideration for his member’s interest.

Counsel for the second respondent submitted that as late as December 2006 African Executive Imports and Exports paid debts for the first respondent. No invoices have been attached/annexed to the Answering Affidavit in this regard. There is no proof whatsoever on the papers of such an allegation. The second respondent was served with the application on 22 March 2007, he filed his answering affidavit on 23 April 2007. Surely he had an opportunity to attach invoices for payments made at least in December 2007. This has not been done, second respondent merely makes bare allegations in this regard, which is, in my view unacceptable.

As already stated clearly the second respondent does not seem to want to pay the applicant any cent in consideration of applicant’s member’s interest in the first respondent despite the fact that it is common cause between the parties that presently the applicant’s loan account stands at R119 335.00.

The second respondent wants the first respondent to be wound up, even in the face of clear facts of the applicant’s loan account of R119 335.00 as reflected on the papers filed of record.

In my considered view it would be fair and just that the second respondent at least pays the applicant R119 335.00 in consideration of applicant’s member’s interest in the first respondent.

Winding up of the first respondent cannot in the circumstances be fair and just especially considering that the second respondent and his wife have been running the first respondent to the exclusion of the applicant. It is clear on the papers that the second respondent and his wife have for some time virtually alienated the applicant from the operation of the first respondent, which means that they run the company as they wish without any input from the applicant. Hence I am of the view that winding up of the first respondent cannot be a viable solution, nor can it be fair in the circumstances, especially not in the light of the loan account of R119 335.00 in favour of the applicant in the first respondent as reflected in the papers filed on record.

In the light of the abovementioned I find that the applicant is at least entitled to be paid R119 335.00, which reflects his loan account, in consideration of his member’s interest in the first respondent on ceasation of his membership in the first respondent.

In the result I make the following order: –

1. The applicant shall cease to be a member of the first respondent from the date of the order made by this honourable court.

2. The second respondent is ordered to pay an amount of R119 335.00 to the applicant in consideration of the member’s interest the applicant enjoys in the first respondent.

3. The said R119 335.00 is to be paid by the second respondent to the applicant within 30 days of the date of this order.

4. The applicant is ordered to sign all the necessary documentation to transfer his member’s interest in the first respondent to the second respondent against payment of the amount of R119 335.00 aforesaid.

5. The second respondent is ordered to pay the costs of this application.

L M MOLOPA

JUDGE OF THE HIGH COURT

9568/2007

Heard on: 22 June 2007

For the Applicant: Adv DH Hinrichsen

Instructed by: Messrs Peter du Toit & Ramulifho, Pretoria

For the Respondents: Adv D Holland-Müter

Instructed by: PJ Kleynhans Attorneys, Pretoria

Date of Judgment: 16 August 2007

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