Vermeulen and Another v C C Bauermeister (Edms) Bpk and Others

• Jurisdiction: South Africa
• Judge: Margo J, Goldstone J and O'Donovan J
• Judgment Date: 16 October 1981
• Court: Transvaal Provincial Division
• Hearing Date: 16 October 1981
• Citation: 1982 (4) SA 159 (T)

Margo J:

Eight parties are referred to in the record of this appeal. They are:

(1)

Mr G C A Vermeulen ('Vermeulen'), the first appellant;

(2)

A S T Tolmay Coal and Mineral Consultants (Pty) Ltd ('Tolmay'), the second appellant;

(3)

C C Bauermeister (Edms) Bpk ('the Bauermeister company'), the first respondent;

(4)

B Mr C C Bauermeister ('Bauermeister'), the second respondent;

(5)

Mr J J Venter ('Venter'), the third respondent;

(6)

Regbeleg (Edms) Bpk ('Regbeleg'), the fourth respondent;

(7)

Desert Spa (Edms) Bpk ('Desert Spa'), the fifth respondent; and

(8)

C Coalsearch SA (Pty) Ltd ('Coalsearch'), which was neither an applicant nor a respondent.

It will be convenient to refer to each of these parties by name, save where the reference is to the appellants or to the respondents collectively.

D Vermeulen and Bauermeister are related and were friends for some 30 years. At one stage they were the sole shareholders in the Bauermeister company, in the proportions of 51 per cent of the shares held by Bauermeister and 49 per cent held by Vermeulen. The total issued capital was 200 shares. Later, it appears, 52 of the company's shares were E transferred to Tolmay. Then, on 2 November 1979, Tolmay agreed to transfer its shares to Bauermeister and Vermeulen. Pursuant to that, two transfer forms were signed in blank on behalf of Tolmay. Bauermeister filled in the deed of transfer delivered to him, for 26 shares, in favour of Venter, as his nominee. The transfer to Venter was then registered on 24 August 1981.

F On 22 October 1980, as a result of differences which had arisen between himself and Bauermeister, Vermeulen filed an application in the Witwatersrand Local Division for a provisional winding up order against the Bauermeister company on the 'just and equitable' ground. The application is still pending; it is opposed. No provisional or other G order has yet been made thereon. By consent various issues raised in the affidavits have been referred for the hearing of viva voce evidence.

Prior to 14 September 1981, the Bauermeister company and Regbeleg had jointly sold their shareholding and loan accounts in Coalsearch to Desert Spa. On 14 and on 22 September 1981 an extraordinary general meeting was held of the shareholders of the Bauermeister company for the H purpose of ratifying the sale under s 228 of the Companies Act 61 of 1973. A resolution confirming the sale was passed by a simple majority. The voting thereon was as follows: in favour of the resolution, Bauermeister with 75 votes, and Venter with 26 votes, and against the resolution, Vermeulen with 73 votes and Tolmay with 26 votes. That gave the supporters of the resolution a total of 101 votes, with a total of only 99 votes against the resolution.

Vermeulen and Tolmay thereupon brought an urgent application in the Witwatersrand Local Division citing all the other parties except Coalsearch. The relief sought was, inter alia, a declaration that the resolution

Margo J

of 22 September 1981 was invalid, and an interdict restraining the transfer by the Bauermeister company of the shares and loan account in Coalsearch to Desert Spa. The application was dismissed with costs by NEDSTADT J, and the present appeal is against that order.

A The appellants' contention is that the transfer of the 26 shares in the Bauermeister company to Venter on 24 August 1981 was void because of the provisions of s 341, read with s 348, of the Companies Act 61 of 1973. Section 341 reads as follows:

'(1) Every transfer of shares of a company being wound up or alteration B in the status of its members effected after the comencement of the winding-up without the sanction of the liquidator shall be void.

(2) Every disposition of its property (including rights of action) by any company being wound up and unable to pay its debts made after the commencement of the winding-up, shall be void unless the Court otherwise orders.'

Section 348 provides that: C

'A winding-up of a company by the Court shall be deemed to commence at the time of the presentation to the Court of the application for the winding-up.'

Mr De Villiers, for the appellants, submitted that the legal effect of these provisions was that the transfer of the 26 shares to Venter was void, because it took place after the presentation of the application D for winding-up, even though no winding-up order has yet been made, and, therefore, that Venter's vote in support of the resolution of 22 September 1981 was invalid, as was the resolution itself. Mr De Villiers confined his argument to s 341 (1) (read with s 348), because s 341 (2) could only have been invoked if there was proof of the inability of the company to pay its debts. There was no evidence of that.

E Mr Schutz, for the respondents, submitted that s 341 (1) of the Companies Act only comes into operation retrospectively if and when a winding-up order is granted, and, therefore, that the transfer to Venter has not been invalidated.

F The legal issue raised by these contentions appears to be res nova in this country.

The purpose of s 348 is not difficult to divine. In Lief NO v Western Credit (Africa) (Pty) Ltd 1966...