South Africa: High Courts - Gauteng

NOT REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

JOHANNESBURG

CASE NO: 5841/08

DATE: 2008-11-04

In the matter between

ROY PEARL MAN AND OTHERS................................................................................ Applicant

and

ZAMIEN INVESTMENTS 75 (PTY) LTD …...............................................................Respondent

J UDGM ENT

WILLIS. J:

The applicants have applied for an order placing the respondent under final winding up in the hands of the Master of the High Court. The underlying causa for this application is an agreement that was concluded between Zamien Investments (Pty) Ltd (the respondent) as purchaser and Rosevean Investments 0015 (Pty) Ltd, as the seller There was a sale of shares in certain companies known as Prostart Investments 95 (Pty) Ltd and Hyde Park Auto (Pty) Ltd for an amount of R10-million.

There is no dispute that after a series of successive payments in terms of the agreement the respondent has ceased to make those payments and appears to have difficulties in doing so. The essential point raised by the respondent is that none of the applicants has locus standi as creditors to apply for the liquidation of the respondent. In particular the respondent relies on the express terms of the agreement providing that the seller is Rosevean Investments 0051 (Pty) Ltd, and Rosevean Investments 0051 (Pty) Ltd is nowhere appearing in these papers as any one of the applicants.

There have been various addendums to (his agreement. The applicants have purported to rely on clause 5.4, which is inserted in the sale agreement which reads as follows:

"The seller hereby acknowledges and agrees that the payment of the purchase price payable in terms hereof to any of the seller's shareholders and/or directors as the case may be, shall constitute a valid and proper discharge of the purchaser of its obligation to advance the purchase price in terms of this agreement. Any amount paid and/or advanced by the purchaser to any of the seller's shareholders and/or directors as the case may be, on behalf of the seller pursuant hereto shall constitute a discharge of the seller's obligation to make such payment/advance to the selier and the purchaser shall not be concerned as to the arrangements between the seller and its shareholders and/or directors as the case may be regarding such payments, amounts and/or advancement." There is also a new clause 21 inserted; 21.1 reads as follows: "Each of Mostert and Pearlman (Mostert and Pearlman are the second and first applicants respectively) hereby agree that in implementing the provisions hereof the interest of the principals i.e. New Port and The Heli Trust (the trustees of New Port and The Heli Trust are also now applicants in this application) the seller has been realised. Consequently each of New Port and Heli Trust hereby irrevocably:

21.1.1 Agree and undertake to procure the payment of the purchase price shall subject to compliance of section 38 of the Companies Act occur in favour of each of them directly and not to the seller. For the purposes of clarity and for accounting purposes the payment of the purchase price shall be deemed to have been a repayment of each of New Port and Heli Trust's respective loan accounts in the seller. In this regard the parties hereby agree that the provisions hereof shall apply mutatis mutandis to the repayment by the seller of the respective loan accounts." There is no dispute that, among the applicants, are shareholders and/or directors of the seller. The point made by Mr Mundell, counsel for the respondent, is that neither 5.4 nor 21.1 in the so-called third addendum imposes any obligation to make payments to persons other than Rosevean Investments 0051 (Pty) Ltd. This contention, so far as it goes, is in my respectful view correct and would have come to the assistance of the respondent were it not for the following:

On 25 March 2008 Tugendhaft Wapnick Banchetti and Partners, attorneys acting on behalf of the respondent, namely Zamien Investments 75 (Pty) Ltd, addressed a letter to the attorneys acting for at least some of the applicants and record as follows:—

"In terms of addendum 3 of the sale of shares and claims agreement it was agreed that payment of the purchase price payable in terms of the sale agreement would occur in favour of each your clients, Messrs Roy Pearlman and David Mostert (i.e. the first and second applicants herein} and not to Rosevean."

Furthermore, on 19 July 2006 the accountant acting for the respondent in this matter addressed a letter to Mr Roy Pearlman, the first applicant, and said as follows:—

"My understanding (after chatting to Justin) is that as part of the sale, The Heli Trust and New Port Finance (on behalf of whom the trustees have brought this application) no longer hold shares or have a loan account in Rosevean as these have now be sold/ceded to Lance and Red Sherrell; Zamien owes The Heli Trust and New Port Finance directly and thus the purchase price will no longer flow through Rosevean to yourselves."

It seems to me especially in the light of the letter addressed by the attorneys acting on behalf of the respondent that one must accept that, in writing, at that stage at the very latest, it was agreed that the payment in terms of the share sale agreement would be effected by the respondent ta the first and the second applicants respectively.

Furthermore, this much also appears from a draft agreement which admittedly was not signed but which was prepared for signature which clearly records that particular arrangement. I refer to paragraph 2 thereof which reads as follows;

"The parties record that payments referred to in paragraph 1.1, 1.2 and 1.3 has been made and shall be made in future to David Carl Mostert and Roy Pearlman (the second and first applicants respectively) in equal shares. In application of the above it is record that each of David Carl Mostert and Roy Pearlman shall be entitled to R1D0 000 in respect of the payments contemplated in paragraph 1 2 above, and R33 333.50 in respect of the payments contemplated in paragraph 1,5." Accordingly, it seems to me that the protests by the respondent that none of the six applicants had any locus standi to bring this application is, in the circumstances, hollow.

In all the circumstances it, in my view, is appropriate to make a provisional order. The return date suggested by Mr Woodland who acts tor the applicants, namely 2 December, is in my view entirely appropriate. The following order is made:

1. The respondent is placed under a provisional winding in the hands of the Master of the High Court.

2 The return date is 2 December 2008.

3. The costs of this application are to be determined by the Court on the return date.