South Africa: High Courts - Gauteng

JUDGMENT –

APPLICATION FOR LEAVE TO APPEAL

WILLIAMS AJ :

1.

The Respondent has applied for leave to appeal against the

granting of prayers 1 to 4 of the Notice of Motion (prayer 4

having been granted on the basis that the costs are to be

taxed as between party and party).

2.

In the Notice of Application for Leave to Appeal, the

Respondent complains:

2.1

2.2

2.3

2.4

2

that the matter should have been referred for the

hearing of oral evidence on account of the disputes

of fact (particularly because the Respondent called

for cross-examination);

that the dispute as to whether the protagonists of

the First Applicant could also commit the Second

Applicant to the application, should have been

determined (since it is inextricably linked to the

merits of the disputes to be resolved in the

application);

that the Respondent's co-shareholders have not as

a matter of fact transferred their shares and that

the proverbial egg can be unscrambled, i.e. that this

was not a factor that should have weighed with me;

that the Sale of Shares Agreement was invalid by

virtue of Section 38 of the Companies Act having

indeed been contravened;

2.5

that the agreement was indeed cancelled as

contended.

3. The fifth, sixth and seventh grounds raised in the Notice of

Application for Leave to Appeal are variations of the

contentions set out above. The eighth ground alleged in the

Application for Leave to Appeal is that I erred in holding that

the Respondent had not established prejudice. Respondent

says that it was not necessary for the Respondent to prove

that he was worse off on account of the alleged fraud.

4.

I have carefully considered the grounds stated in the

Application for Leave to Appeal and the arguments so ably

raised by counsel for the Respondent and set out in his

Heads of Argument.

5.

There is however no reasonable prospect of another Court

coming to a different conclusion.

6.

The Respondent's version, on further reflection, remains to

me to be a far-fetched and clearly untenable version which

was properly rejected on the papers.

7.

6.1

6.2

6.3

6.4

4

Respondent's

prepared

to

co-shareholders

were

transact and transfer their shares on the very basis the

Respondent complains bitterly about.

The co­-

shareholders under oath disavow the Respondent's

version that he was forced into a transaction or misled

as to the nature of the transaction (and that he

thought Mr Heppel was his attorney).

The Respondent is a lone voice in regard to various

other grounds of alleged fraud which are refuted by

various other parties from different quarters (notably

also Mr Bridge).

I alluded in the Judgment also to the lapse of time

before

the

Respondent's

myriad

of

complaints

surfaced.

I abide in paragraphs 23 to 32 of my Judgment.

My approach that it was not necessary to determine whether

the Second Applicant was properly before Court or not, did

not affect the outcome of the application.

8.

My comment that the proverbial egg could

not be

unscrambled was an orbiter remark, which also did not have

any influence on the outcome. That was said in the context

that the Respondent's shareholders were content with the

transaction and that much water had flowed under the

bridge after they had transferred their shares (or remained

prepared to do so).

9.

Section 38 of the Companies Act was not contravened.

There was not even a prima facie indication thereof. This is

dealt with in paragraphs 15 to 17 of my Judgment.

I reiterate that the Respondent himself certified that Section

38 had not been contravened (annexure "Xl" to the

Replying Affidavit). I pointed out that it is not unusual when

shares are sold, that the company at the same time settles

its indebtedness under loan accounts (i.e. that it is the

company's indebtedness).

That is not tantamount to

assisting the purchaser to acquire the shares.

Also the

diversion of profits (so as to settle a loan account or

otherwise) is not ipso facto assistance under Section 38.

10.

Nor am I persuaded that another Court will come to a

different conclusion on my finding in regard to the alleged

cancellation of the Agreement.

Letting aside the issue of

whether or not the cancellation had to be done by the sellers

jointly, it was clearly established that the Respondent,

despite threatening cancellation, never actually moved to

cancel.

On the contrary he co-operated in receiving

payment, notwithstanding that such payment was (on the

Respondent's version) late.

I have dealt with the

cancellation in paragraphs 18 to 22 of the Judgment and

abide thereby.

11.

Returning to the alleged fraud, more specifically the

Respondent's contention that I should have referred the

matter for cross-examination, the Respondent's version was

clearly so untenable that cross-examination would not have

disturbed the inherent improbabilities in the Respondent's

version.

The mere fact that a party calls for cross­

examination does not mean that he or she is entitled to a

referral.

The Court may still deploy the robust approach

which is explained in the recent Judgments which I have

referred to in my Judgment.

12.

Whether my finding that the Respondent had not established

----­

prejudice was correct or not (both as to its correctness and

its relevance), was not a determining factor. I had already

rejected the Respondent's intentions of fraud.

13.

In the result the Respondent's application for leave to appeal

is dismissed with costs.

J O WILLIAMS AJ17 October 2007