Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others
Jurisdiction | South Africa |
Judge | Nel J |
Judgment Date | 07 September 1992 |
Citation | 1993 (2) SA 784 (C) |
Court | Cape Provincial Division |
G Nel, J.:
At the beginning of 1979, the first defendant, then known as Rosebank Parkade (Pty) Ltd, was the owner of certain shares in Findon Investments (Pty) Ltd which entitled the owner thereof to the use and occupation of a flat in Clifton. During February 1979 one Shapiro, acting on behalf of the plaintiff, and one Swersky, the then sole director of the H first defendant, entered into negotiations in regard to the purchase and sale of the shares and a loan account. Arising out of these negotiations, the plaintiff alleged that a sale had been concluded but this was denied by the first defendant who subsequently transferred the shares and loan account to second defendant. After an unsuccessful application by the plaintiff for delivery of the shares an action was instituted against the first defendant (case No 1357/82). A judgment in plaintiff's favour was I granted on 4 August 1987. An appeal to the Appellate Division was dismissed on 20 March 1989. The first defendant did not deliver the shares and a month later an application was brought by the plaintiff against, inter alia, the three defendants, to be declared in contempt of Court arising out of the failure to deliver the shares to plaintiff. The J application was dismissed. On
Nel J
A 4 August 1989 the plaintiff instituted this action against the first and second defendants as well as the third defendant who at all material times either owned or allegedly controlled a number of interrelated companies, including the first and second defendants.
In its particulars of claim (as amended) the plaintiff alleged as follows:
'. . .
On 20 March 1989 the Appellate Division of this honourable Court dismissed an appeal by the first defendant against the above judgment.
First defendant has failed to comply with the aforesaid judgment having transferred the said shares and loan account to the second C defendant in December 1979.
Both first and second defendant aver that first defendant has called upon the second defendant to deliver the said shares and loan account to first defendant but that the second defendant has declined to do so, and first defendant is unable to compel it to do so. D
In regard to such transfer the plaintiff states:
At all material times hereto:
The third defendant had effective share and board control of the first defendant and the second defendant, alternatively it had such control in E relation to procuring the transfer from the first defendant to the second defendant referred to in para 12.2.1 herein. Particulars of such control will appear from para 16 herein.
The third defendant was the beneficial owner of the shares and claims on loan account referred to in para F 5(a) herein, the first defendant and subsequently the second defendant being the vehicles through which the third defendant held his interest in the said shares and claims on loan account and, accordingly, the right to occupy the said flat, parking spaces and G servants' rooms.
Further and at all material times:
the first defendant and the second defendant were aware and, in particular, were so aware in December 1979 of the February 1979 sale referred to in para 5 H herein to Shapiro or his nominee; and
the transfer of the said shares and loan account to the second defendant in December 1979 was accordingly not a bona fide transfer and was in law a fraud upon the said Shapiro and/or his nominee; and
I the third defendant was also aware of the February 1979 sale, procured the said transfer in December 1979 and was accordingly party to the said fraud; and
the awareness of the first defendant of the February 1979 sale arose because of the knowledge thereof by the said Swersky, a director of first defendant, alternatively by reason of the knowledge thereof of J the
Nel J
A third defendant as the directing mind and effective controller of the first defendant; and
the awareness of the second defendant of the February 1979 sale arose because of the knowledge thereof by the said Swersky, a director of the second defendant, alternatively by reason of the knowledge thereof of B the third defendant as the directing mind and effective controller of the second defendant.
In the premises:
Plaintiff states:
that the transfer of the said shares and claims on loan account by the first defendant to the second C defendant was not a bona fide transfer, was a fraud on the rights of the said Shapiro and/or his nominee and cannot be set up by the first defendant or the second defendant against the plaintiff's claims; and
accordingly, that the second defendant, alternatively D the first defendant, is obliged to deliver the said shares and claims on loan account to the plaintiff.
Alternatively to 12.1 herein:
the third defendant knew of the rights of the said Shapiro and/or his nominee and in fraud of such E rights caused the said shares and claims on loan account to be transferred from the possession of the first defendant to the possession of the second defendant, thereby attempting to procure for himself the continued right to utilise the said flat, parking spaces and servants' rooms despite the sale of February 1979; F
accordingly, that the alleged separate corporate personality of first defendant and second defendant should be disregarded by this honourable Court in order to give effect to the judgment referred to in para 8 above.
G The plaintiff states further that the third defendant has at all material times had it in his power to procure that second defendant disgorge the said shares and loan account either to the plaintiff or to the first defendant.
Despite this, despite his control of the second defendant and H purely to advance his own ends and to perpetuate the fraud which he, the first defendant and the second defendant had committed on Shapiro and/or his nominee, the third defendant has failed or refuses to procure such disgorgement.
In the premises the plaintiff is entitled to an order compelling the third defendant to procure such disgorgement. I
Particulars of the share and board control referred to in para 11.1.1 above are as follows:
The first defendant was incorporated on 18 January 1967;
All the ordinary shares and all the preferred shares in first defendant have at all material times since, at latest, 31 December J 1976 been owned by Gerald Lubner Family Trust (Pty) Ltd.
Nel J
A The 14 100 issued shares of Gerald Lubner Family Trust (Pty) Ltd have at all material times been owned as follows:
Laura Lubner Trust | 2 115 |
Maxine Esta Lubner Trust | 2 115 |
Karen Helen Lubner Trust | 2 115 |
B David Peter Lubner Trust | 2 115 |
Wencor (Pty) Ltd | 5 640 |
The board of Gerald Lubner Family Trust (Pty) Ltd at all material times consisted of a certain Abraham Swersky, who was appointed on 29 September 1975, and one Kathleen Frances Smith, the third C defendant's secretary, who was appointed on 6 October 1988.
Wencor (Pty) Ltd is a company with its registered office at 14 Dorp Street, Cape Town. This is the place of business in Cape Town of third defendant and/or the companies controlled by him. D
The four issued ordinary shares of Wencor (Pty) Ltd have at all material times been owned as follows:
Laura Lubner Trust | 1 |
Maxine Esta Lubner Trust | 1 |
Karen Helen Lubner Trust | 1 |
E David Peter Lubner Trust | 1 |
The board of directors of Wencor (Pty) Ltd at all material times consisted of the said Abraham Swersky as sole director who was appointed on 15 September 1975.
The said trusts are trusts for third defendant's children and the trustees of such trusts have at all material times been prepared F to carry out the instructions of the third defendant in relation to the vehicle through which he holds the said shares and loan account referred to in para 5(a) herein.
The third defendant is in control through the said trustees of the 14 100 shares of Gerald Lubner Family Trust (Pty) Ltd and that G company is the sole shareholder in first defendant.
The board of the first defendant at all material times consisted of the said Abraham Swersky as sole director. The said Swersky was appointed as director of first defendant on 15 September 1975.
H The said Swersky and the said Smith have at all material times been prepared to carry out the instructions of the third defendant on the said boards in relation to the vehicle through which he held the said shares and loan account referred to in para 5(a).
In or about December 1979, pursuant to the instructions of the third defendant given orally at the time to the said Swersky, the I first defendant acting through its board, alternatively a meeting of the first defendant's members (details of which are unknown to the plaintiff), transferred the said shares to the second defendant.
Second defendant was incorporated on 11 November 1968 as Gerald J Lubner Enterprises (Pty) Ltd and changed its name to
Nel J
A Gerald Lubner & Associates (Pty) Ltd and thereafter in 1976 to its present name.
From 20 April 1977 until the conversion hereinafter referred to, all the ordinary shares in second defendant were owned by the third defendant.
B From 20 April 1977 until the conversion hereinafter referred to, all the preference shares of second defendant were also owned by the third defendant. On 1 June 1985, the said ordinary and the said preference shares were converted to 250 000 deferred ordinary shares all...
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The Shipping Corporation of India Ltd v Evdomon Corporation and Another
...of Modern Company Law 5th E ed (by LCB Gower) at 124-34; Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others 1993 (2) SA 784 (C); Dithaba Platinum (Pty) Ltd v Erconovaal Ltd and Another 1985 (4) SA 615 (T); R v Milne & Erleigh (7) 1951 (1) SA 791 (A); Botha v Van Niekerk ......
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Erf 3183/1 Ladysmith (Pty) Ltd and Another v Commissioner for Inland Revenue
...1982 (3) SA 330 (T) Botha v Van Niekerk en 'n Ander 1983 (3) SA 513 (W) Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd 1993 (2) SA 784 (C) H Commissioner for Inland Revenue v Butcher Brothers (Pty) Ltd 1945 AD 301 Commissioner for Inland Revenue v Carltonville Motors (Pty) Ltd ......
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Rees and Others v Harris and Others
...Co 1985 (3) SA 916 (A): dictum at 939F – 940A applied A Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others 1993 (2) SA 784 (C ): dictum at 821 considered Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others 1995 (4) SA 790 (SCA): B applied Ebrahim and A......
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Amlin (SA) Pty Ltd v Van Kooij
...Botha v Van Niekerk en 'n Ander 1983 (3) SA 513 (W): considered C Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd 1993 (2) SA 784 (C): Lategan and Another NNO v Boyes and Another 1980 (4) SA 191 (T): considered Maitland and Kensington Bus Co (Pty) Ltd v Jennings 1940 CPD 489: co......
-
The Shipping Corporation of India Ltd v Evdomon Corporation and Another
...of Modern Company Law 5th E ed (by LCB Gower) at 124-34; Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others 1993 (2) SA 784 (C); Dithaba Platinum (Pty) Ltd v Erconovaal Ltd and Another 1985 (4) SA 615 (T); R v Milne & Erleigh (7) 1951 (1) SA 791 (A); Botha v Van Niekerk ......
-
Erf 3183/1 Ladysmith (Pty) Ltd and Another v Commissioner for Inland Revenue
...1982 (3) SA 330 (T) Botha v Van Niekerk en 'n Ander 1983 (3) SA 513 (W) Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd 1993 (2) SA 784 (C) H Commissioner for Inland Revenue v Butcher Brothers (Pty) Ltd 1945 AD 301 Commissioner for Inland Revenue v Carltonville Motors (Pty) Ltd ......
-
Rees and Others v Harris and Others
...Co 1985 (3) SA 916 (A): dictum at 939F – 940A applied A Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others 1993 (2) SA 784 (C ): dictum at 821 considered Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others 1995 (4) SA 790 (SCA): B applied Ebrahim and A......
-
Amlin (SA) Pty Ltd v Van Kooij
...Botha v Van Niekerk en 'n Ander 1983 (3) SA 513 (W): considered C Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd 1993 (2) SA 784 (C): Lategan and Another NNO v Boyes and Another 1980 (4) SA 191 (T): considered Maitland and Kensington Bus Co (Pty) Ltd v Jennings 1940 CPD 489: co......