Peterson and Others v Billingham and Others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Roelofse AJ
• Judgment Date: 13 October 2022
• Docket Number: 2896/2021
• Hearing Date: 04 October 2022
• Court: Mpumalanga Division (Main Seat)
• Citation: 2022 JDR 2859 (MN)

Roelofse AJ:

INTRODUCTION:

[1]

This is an interlocutory application in terms of the provisions of Rule 6(5)(g) of the Uniform Rules of Court (the Rule 6(5)(g) application). The applicants in the Rule 6(5)(g) application are the trustees of the Peterson Trust. The first to third respondents are cited in their capacities as the trustees of the Billingham Trust. [1]

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Roelofse AJ

[2]

The fourth respondent is a company with limited liability. The company owns farmland estimated at R 55 million. The Peterson Trust holds 45.5% of the shares in the company. The Billingham Trust holds the remainder of the shares. Prior to 1997, another trust, the Wilson Family Trust, held 9% of the shares in the company and the Peterson and Billingham Trusts each held 45.5% of the shares in the company.

[3]

The relief that is sought in the main application is against the company.

LITIGATION:

The main application:

[4]

In the main application, the Peterson Trust seeks specific performance of a term in the company's Articles of Association in terms whereof the shareholders have a right of pre-emption in the event any shareholder wishes to sell its shareholding in the company. [2] In addition, the Peterson Trust seeks ancillary relief pursuant to the order for specific performance and costs in the event the respondents oppose the application. [3]

[5]

The Peterson Trust alleges in the main application that when the Wilson Family Trust sold its shareholding in the company to the Billingham Trust (the sale) it did so in breach of clause 14.2 of the company's Articles of Association because

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Roelofse AJ

the Peterson Trust was not given the right to pre-emption to exercise and was also unaware of the sale.

[6]

In the Billingham Trust's answering affidavit, Ms. Jessie Margaret Billingham, who is a trustee of the Billingham Trust, alleges that the Peterson Trust was aware of the sale and attaches to her answering affidavit a purported resolution by the company authorising the sale (Annexure "M9"). From the resolution, it appears that Mr. Mervin Hilton Peterson, who is a trustee of the Peterson Trust and director of the company, together with the other directors being Mr. I M Billingham and Mr. A J Wilson met on 2 April 1997 and resolved to sell the Wilson Trust's shares to the Billingham Trust. Three signatures appear on the purported resolution.

[7]

In its replying affidavit, the Peterson Trust denies that it was aware of the sale when the sale was concluded and alleges that Mr. Peterson was not a signatory to the resolution. Mr. I J Billingham and Mr. A J Wilson, who purportedly co-signed the resolution, has passed away.

[8]

The Peterson Trust therefore challenges its knowledge of the sale and its consent thereto in the main application.

The Rule 6(5)(g) application

[9]

In the Rule 6(5)(g) application, the Peterson Trust alleges that the dispute over its consent to the sale and the authenticity of the purported resolution is incapable of being decided on affidavit, therefore the need for the Rule 6(5)(g) application.

[10]

In the Rule 6(5)(g) application, the Peterson Trust is seeking that certain defined disputes of fact an application under case number 2896/2021 (the main application) be referred for the hearing oral evidence, alternatively, that the main application be referred to trial. In the notice of motion in the Rule 6(5)(e)

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application, the Peterson Trust pleads that the main application '….be referred to a hearing of oral evidence:

….in connection with the dispute relating to annexure "M9" to the respondents' answering affidavit, in particular but not limited to the question whether the Billingham Trust; -

1.1

Was aware of the sale of the shares of the Wilson Family Trust to the Billingham Family Trust as reflected in annexure "M9" to the answering afdaivt; and/or

1.2

Consented to such sale of shares.'

[11]

The Billingham Trust opposes the Rule 6(5)(e) application. The Billingham Trust alleges: that the Peterson Trust's cause of action has prescribed; material disputes of facts exist of which the Billingham Trust was aware, yet it proceeded with motion proceedings; no dispute exists which cannot be resolved on paper; and, that there is no person to give viva voce evidence that is not already before the court on affidavit.

[12]

In addition, on the morning of the hearing of this application, the Billingham Trust raised a point in limine, not previously raised, that the application is not properly authorised by the Billingham Trust because the supporting affidavit of the third applicant was signed in Melbourne, Australia. The Billingham Trust argued that the affidavit does not comply with the provisions of Justices of the Peace and Commissioners of Oaths Act 16 of 1963 and the regulations promulgated thereunder. In my view, this objection should have come much earlier and properly pleaded in the answering affidavit.

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Roelofse AJ

[13]

Despite the third applicant's affidavit being commissioned in Australia, the second applicant's affidavit was properly commissioned and no evidence exists over the number of trustees of the Peterson Trust that must act in terms of the trust's deed of trust...