The case Kriedemann and Another v One Division Investments 139 (Pty) Limited and Others, concerns the application for a order provisionally winding up a company in terms of section 81(1)(d)(iii) of the Companies Act, Act 71 of 2008. Section 81(1)(d)(iii) provides for the liquidation of a company on the grounds that it is just and equitable. In this specific instance the applicants argued that the relationship between the directors of the relevant company (all of whom are siblings) had completely broken down with no further trust and confidence remaining between them. The Court found that the applicants established prima facie grounds that it was just and equitable for the company to be wound up. The Court was of the opinion that the breakdown of the relationship between the siblings caused the business of the company to come to a standstill with no reasonable hope of reconciliation existing between the siblings.
Compiled by: Lucas Theron (B.Com Law, LL. B, Dipl. Fin. Plan); source: https://www.lexisnexis.co.za/
Kriedemann and another v One Vision Investments 139 (Pty) Limited and others JOL 40994 (ECL)
Case Number: 850 / 2018
Judgment Date: 13 / 12 / 2018
Country: South Africa
Jurisdiction: High Court
Division: East London Circuit Local Division
Bench: JM Roberson J
Corporate and Commercial – Company law – Provisional winding up of company – Requirements
The first applicant and the second and third respondents were siblings. Their late father and his brother had owned a farm in equal shares. The siblings purchased a 50% share of the farm after their uncle died. The first applicant (“Renae”) was a trustee of the second applicant, the second respondent (“Garry”) was a trustee of the fourth respondent and the third respondent (“Rowan”) was a trustee of the fifth respondent. According to Renae in 1983, a partnership was formed between the siblings and their father, the father having a 50% interest in the partnership and the siblings 16.67% each. Garry and Rowan denied that there was a partnership and maintained that it was merely a situation of co-ownership.
Portions of the farm were subdivided for the purpose of selling residential erven. The first respondent (“One Vision”) was the company formed as the development company and the three siblings held equal shares therein through their respective trusts. The siblings were also the directors of One Vision.
The present application was for the provisional winding up of One Vision on the grounds that it was just and equitable, as provided for in section 81(1)(d)(iii) of the Companies Act 71 of 2008.
Held that the total breakdown in the relationship amongst the siblings, and the lack of trust and confidence, meant that One Vision could not continue to its business as envisaged, and for the benefit of the shareholders. In the circumstances, the court was satisfied that, prima facie, grounds had been established that it was just and equitable that One Vision be wound up.