Clutchco (Pty) Ltd v Davis

• Jurisdiction: South Africa
• Judge: Mpati DP, Streicher JA, Nugent JA, Van Heerden JA and Comrie AJA
• Judgment Date: 24 March 2005
• Citation: 2005 (3) SA 486 (SCA)
• Docket Number: 35/04
• Hearing Date: 04 March 2005
• Counsel: B J Manca (with P B J Farlam) for the appellant. No appearance for the respondent.
• Court: Supreme Court of Appeal

Comrie AJA: E

[1] Section 32 of the Constitution provides:

'(1) Everyone has the right of access to -

(a)

any information held by the State; and

(b)

any information that is held by another person and that is required for the exercise or protection of any rights. F

(2) National legislation must be enacted to give effect to this right, and may provide for reasonable measures to alleviate the administrative and financial burden on the State.'

The national legislation contemplated by s 32(2) is the Promotion of Access to Information Act 2 of 2000 (PAIA). Part 3 of that statute regulates the rights of access to the records of private bodies. The G appellant, a private company, is such a body.

[2] The appellant is a small private company that houses a family business. Seventy per cent of the shares are held by the Davis Family Trust, which appears to be controlled by Frederick Davis-Armitage. He is the sole director of the company. He has two sons: Gordon Davis and Andrew Davis, who is the present respondent. H Gordon Davis was appointed general manager and he attends to the administration of the company and its business. In 1999, the respondent joined the company. He purchased 30% of the shareholding from his father (or the trust) for R100 000; he was made a director; and he was appointed workshop manager. I

[3] Unfortunately, there was a family fall-out. In the result, the respondent was removed as a director and removed from his post as workshop manager. However, he retains his 30% shareholding. There were some oral negotiations for the acquisition of those shares by the other J

Comrie AJA

shareholder, but agreement was not reached. The respondent began to ask for information relating to the A appellant's finances. He was furnished with audited financial statements. He continued to press for more information, in particular, for access to the company's books of first accounting entry such as cash books, ledgers, journals and invoice books. This was denied. Eventually, in January 2003, the respondent submitted a formal request in terms of s 53(1) of PAIA for access to the following B company records:

'1.1

Volledige kasboeke vanaf Maart 1999 tot 21 Januarie 2003

1.2

Gedetailleerde algemene grootboek vanaf Maart 1999 tot 21 Januarie 2003

1.3

Gedetailleerde debiteure grootboek vanaf Maart 1999 tot 21 C Januarie 2003

1.4

Gedetailleerde krediteure grootboek vanaf Maart 1999 tot 21 Januarie 2003

1.5

Volledige joernale ten opsigte van aandeelhouers se leningsrekening.'

[4] Part G of the request reads as follows: D

'G. Besonderhede van reg wat uitgeoefen of beskerm word

1. Dui aan watter reg uitgeoefen of beskerm word: Die reg om die werklike finansiële posisie van die maatskappy (Clutchco) vas te stel.

2. Verduidelik waarom die rekord wat versoek word, benodig word om voormelde reg uit te oefen of te beskerm: Dit sal my in staat stel om die finansiële rekords te rekonstrueer en dan die waarde van my 30% aandeel te bepaal.'

[5] On 29 January 2003, the company's attorneys responded: E

'Regarding your client's request for certain records and information from my client, it is my instructions that, in view of the fact that the other shareholder in the company is no longer interested in purchasing your client's shares in the company, the question regarding the value thereof is no longer relevant, and the information and records which are requested is therefore denied.' F

[6] In late February 2003, the respondent launched an application in the Cape High Court for an order compelling the company to furnish copies of the accounting records which I have listed in para [3] above. The application was opposed. The matter was heard by Meer J who, subject to certain riders, granted the order as prayed with costs. The judgment is reported at 2004 (1) SA 75 (C). The learned G Judge refused leave to appeal, but such leave was granted on petition to this Court. The appeal is unopposed.

[7] As appears from the reported judgment, both parties in their affidavits adumbrated their respective reasons for request and refusal. H The respondent claimed that, as a shareholder, he was entitled to access to the records in question, especially as he suspected (for reasons given) that not all the company's transactions were reflected in the financial statements. He claimed further that he wished to reconstruct the financial records in order to determine the company's real income. This would enable him to determine the real value of I his 30% shareholding, which he proposed to sell.

[8] In his answering affidavit, Mr Davis-Armitage stated that he endeavoured to buy his son's shares. In terms of clause 7.7.3 of the articles of association, the company's...