THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable

Case no: 1029/2019

In the matter between:

ANITA JULIA GENT
FIRST APPELLANT
BONNOX (PTY) LIMITED
SECOND APPELLANT

and

PETER DANIËL JACOBS DU PLESSIS
RESPONDENT

Neutral citation: Gent and Another v Du Plessis (1029/2019) [2020] ZASCA 184
(24 December 2020)

Bench:
MBHA, VAN DER MERWE and MAKGOKA JJA and WEINER and
SUTHERLAND AJJA

Heard:
13 November 2020

Delivered: This judgment was handed down electronically by circulation to the
parties' representatives via email, publication on the Supreme Court of Appeal
website and release to SAFLII. The date and time for hand-down is deemed to be
10:00 am on 24 December 2020.

Summary: Civil procedure – in the absence of a cross-appeal respondent not
entitled to variation of the order of the court below.
Company law – section 163 of Companies Act 71 of 2008 – where no case made out
under s 163(1), court not empowered to grant relief in terms of s 163(2) – oppressive
or unfairly prejudicial conduct not proved.

__________________________________________________________________

ORDER
__________________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (Mavundla and
Mali JJ and Botes AJ, sitting as court of appeal): judgment reported sub nom
Du Plessis v Bonnox Proprietary Limited and Another [2019] ZAGPPHC 515

(a)
The appeal is upheld with costs, including the costs of two counsel.
(b)
The order of the full court is set aside and replaced by the following order:
‘The appeal is dismissed with costs.’

__________________________________________________________________

JUDGMENT
__________________________________________________________________
Mbha JA (Van der Merwe and Makgoka JJA and Weiner and Sutherland
AJJA concurring)

[1] This appeal concerns a decision of the Full Court of the Gauteng Division of
the High Court, Pretoria (Botes AJ, Mavundla and Mali JJ concurring) (the full
court). It ordered the appellant, Anita Julia Gent (Ms Gent),1 to sell her majority
shareholding in Bonnox (Pty) Ltd (the company) to the respondent, Pieter Daniël
Jacobs du Plessis (Mr du Plessis), notwithstanding its conclusion that the respondent
had not shown the requirements of s 163(1) of the Companies Act 71 of 2008 (the
Act).2

1 Although the heading to the present appeal refers to both the first appellant (Anita Julia Gent) and the second
appellant (Bonnox (Pty) Ltd), it is only Ms Gent who is appealing the order of the full court.
2 Section 163 of the Act provides as follows:
'Relief from oppressive or prejudicial conduct or from abuse of separate juristic personality of company
(1)
A shareholder or a director of a company may apply to a court for relief if—
(a)
any act or omission of the company, or a related person, has had a result that is oppressive or unfairly prejudicial
to, or that unfairly disregards the interests of, the applicant;
(b)
the business of the company, or a related person, is being or has been carried on or conducted in a manner that
is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, the applicant; or
(c)
the powers of a director or prescribed officer of the company, or a person related to the company, are being or
have been exercised in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the
interests of, the applicant.
(2)
Upon considering an application in terms of subsection (1), the court may make any interim or final order it
considers fit, including—
(a)
an order restraining the conduct complained of;
(b)
an order appointing a liquidator, if the company appears to be insolvent;
(c)
an order placing the company under supervision and commencing business rescue proceedings in terms of
Chapter 6, if the court is satisfied that the circumstances set out in section 131(4)(a) apply;
(d)
an order to regulate the company's affairs by directing the company to amend its Memorandum of Incorporation
or to create or amend a unanimous shareholder agreement;
(e)
an order directing an issue or exchange of shares;
(f)
an order—
(i)
appointing directors in place of or in addition to all or any of the directors then in office; or
(ii)
declaring any person delinquent or under probation, as contemplated in section 162;
(g)
an order directing the company or any other person to restore to a shareholder any part of the consideration that
the shareholder paid for shares, or pay the equivalent value, with or without conditions;

[2] This court granted Ms Gent special leave to appeal against the order of the
full court. It, however, dismissed Mr du Plessis’ application for special leave to
cross-appeal against the full court’s order refusing the winding-up of the company
and directing Ms Gent to sell her shares to him. In this court, Mr du Plessis conceded
from the outset that the full court had erred in making the buy-out order and made it
clear that he did not support it. In my view, the concession was made fairly and
properly. When the full court found that the grounds relied upon by Mr du Plessis
did not fall within the ambit of s 163(1) of the Act, that should have been the end of
the matter. Indeed, absent the statutory criteria being fulfilled, the full court did not
have jurisdiction to order Ms Gent to purchase Mr du Plessis’ minority shareholding.
An applicant is only entitled to relief under s 163(1) upon satisfying the criteria set
out therein. And only then is a court empowered to grant appropriate relief in terms
of s 163(2) of the Act, upon the proper exercise of its discretion. There was no 'duty'
on the full court whatsoever to craft a 'clean break' between the parties, purportedly
in terms of s 163(2) of the Act.3

[3] Mr du Plessis’ argument in this court was that the full court should have held
that he had established oppressive or unfairly prejudicial conduct under s 163(1);

(h)
an order varying or setting aside a transaction or an agreement to which the company is a party and
compensating the company or any other party to the transaction or agreement;
(i)
an order requiring the company, within a time specified by the court, to produce to the court or an interested
person financial statements in a form required by this Act, or an accounting in any other form the court may
determine;
(j)
an order to pay compensation to an aggrieved person, subject to any other law entitling that person to
compensation;
(k)
an order directing rectification of the registers or other records of a company; or
(l)
an order for the trial of any issue as determined by the court.
(3)
If an order made under this section directs the amendment of the company's Memorandum of Incorporation—
(a)
the directors must promptly file a notice of amendment to give effect to that order, in accordance with section
16(4); and
(b)
no further amendment altering, limiting or negating the effect of the court order may be made to the
Memorandum of Incorporation, until a court orders otherwise.’
3 Du Plessis v Bonnox Proprietary Limited and Another [2019] ZAGPPHC 515 para 67.

and, on that basis, should have directed Ms Gent to purchase his shares in the
company. A draft order was prepared and attached to the respondent’s heads of
argument, in which it was proposed that Ms Gent be directed to purchase the
respondent's shares in the company at fair value, calculated pro rata to the total
issued share capital of the company. After setting out the background of the matter,
I shall first consider the impact of the refusal of leave to cross-appeal on this
argument and thereafter whether the requirements of s 163(1) of the Act had been
proved.

[4] The company was established by Ms Gent’s father, Mr Volker Herman
Schadewaldt (Mr Schadewaldt), in 1957 and in due course became a highly
profitable company. Its business is the manufacturing of fencing. Mr Schadewaldt
was for the better part of his life the majority shareholder of the company and also
its managing director, until he retired in 2010. During 1994 Mr Schadewaldt
transferred 15 shares in the company to Mr du Plessis. In 1998 he transferred the rest
of his shares in the company as follows: 80 shares to Ms Gent; a further 45 shares to
Mr du Plessis; and 10 shares to the company’s accountant, Mr Smith. As a result of
her majority shareholding, Ms Gent became the company’s sole director until she
resigned of her own accord on 18 January 2012. During 2012 Mr du Plessis also
acquired the shares of Mr Smith. In the result, Mr du Plessis and Ms Gent became
the sole shareholders in the company. Ms Gent holds 53.33 percent of the issued
share capital in the company while Mr du Plessis holds the remaining 46.67 percent.
Ms Gent was re-appointed as a director of the company on 18 January 2013.

[5] Mr du Plessis was employed by the company from 1986, where he started as
a fitter and turner. He was promoted to general manager during 2010 and, ultimately,

was appointed as a director during 2012, when Ms Gent resigned as such. He was,
however, removed as a director at a meeting of the shareholders on 6 March 2013.
Mr du Plessis was subsequently suspended and, after being found guilty on four
counts of gross misconduct (one of which involved dishonesty) at a disciplinary
hearing, dismissed as an employee during August 2014.

[6] The charges against Mr du Plessis arose after Ms Gent’s uncovering, upon her
return to the company in 2013, of a number of irregularities committed by Mr du
Plessis. These included that Mr du Plessis, who occupied a position of trust in the
company at the time, conducted his own private business, ‘Blumnet’, whose business
was producing a woven mesh fence similar to the one manufactured by the company,
by making use of the resources of the company. In the process, Blumnet was also
used by Mr du Plessis to commit a fraud against the fiscus. In this regard, Mr du
Plessis engineered a simulated transaction in which an invoice, in the sum of
R641 293, was issued in the books of Blumnet and addressed to the company as if
to reflect an honest exchange of services for money. Significantly, Mr du Plessis
admitted to this misconduct.

[7] Even more serious was when, on 5 March 2013, the day before the
shareholders’ meeting where a resolution for his removal as a director was to be
tabled, Mr du Plessis maliciously and surreptitiously obtained an order placing the
company in business rescue. This was an attempt to prevent a majority resolution to
remove him as director. He abused his position of trust and manipulated two
employees to bring the application for business rescue in their names. The business
rescue order was subsequently set aside at the instance of Ms Gent in an urgent
application on 2 April 2013, despite the application being vigorously opposed by Mr

du Plessis. In rescinding the order, the court made a punitive costs order, on the
attorney and own client scale, against the employees who had brought the
application. As I have said, these employees were merely Mr du Plessis' proxies.
Ultimately, and as a gesture of goodwill in an attempt to reconcile with Mr du
Plessis, Ms Gent paid 71 percent of these costs from her own funds. Significantly,
Mr du Plessis conceded that the manner in which the application for business rescue
was launched, ie without Ms Gent's knowledge, as obviously an interested party,
was ill-advised and ultimately fatal to that application.

[8] On 30 June 2014, Mr du Plessis brought an application in the Gauteng
Division of the High Court for an order that the company be wound up on the basis
that it was just and equitable to do so, as envisaged in s 344(h) of the Companies
Act 61 of 1973 (the old Companies Act), read together with item 9 of Schedule 5 of
the Act. In the alternative, he sought an order directing Ms Gent to purchase his
shareholding in the company, at a price to be determined by an independent expert.
He further sought an order that certain machinery be returned to him, but this aspect
was disputed and was accordingly referred to trial. However, nothing turns on this
issue in the present appeal and it need not detain us further.

[9] Mr du Plessis’ grounds for seeking to liquidate the company were, briefly:
that it was a ‘private domestic company’ whose affairs had been conducted in a
manner akin to that of a partnership; that his relationship with Ms Gent as
co-shareholders of the company had broken down irretrievably; that Ms Gent had
excluded him from the management of the company and from its board of directors;
that a ‘deadlock’ had arisen between the shareholders of the company which was not

capable of resolution; and that Ms Gent’s conduct was oppressive in nature in that it
undermined his rights as the minority shareholder of the company.

[10] In pursuance of the alternative relief that Ms Gent be directed to purchase his
shares in the company, Mr du Plessis sought to invoke the provisions of s 163 of the
Act. He alleged that Ms Gent, in her capacity as the majority shareholder and director
of the company, had acted in an unfairly prejudicial and oppressive manner towards
him.

[11] The application came before Hughes J on 30 March 2016. The learned Judge
held that although the company was akin to a partnership, it was a solvent domestic
company whose substratum remained intact. Although the relationship between the
two shareholders had broken down irretrievably, and was not capable of being
resolved, the court a quo found that there was no deadlock that rendered it just and
equitable to wind up the company. Applying the so-called 'clean hands' principle the
court further found that, as Mr du Plessis had through his own conduct caused the
breakdown in the shareholders’ relationship, he was not entitled to apply for the
winding up of the company on the just and equitable ground.4

[12] In respect of the s 163 relief, Hughes J found that Mr du Plessis had not
established the requisites for that section to be invoked. The court found, in
particular, that neither Mr du Plessis’ alleged loss of confidence in the manner in
which the company’s affairs were being conducted, nor his resentment at having
been outvoted, fell within the purview of s 163 of the Act. The court accordingly
dismissed the winding up application with costs.

4 Emphy and Another v Pacer Properties (Pty) Ltd 1979 (3) SA 363 (D) at 368E-H.

[13] With the leave of this court,5 Mr du Plessis appealed to the full court which,
on 18 April 2019, dismissed his appeal against the refusal of the court a quo to order
the winding up of the company. It rejected the submission that the relationship
between the parties resembled a partnership between shareholders. It held that it
could not be said that the company was, in substance, a partnership in the guise of a
private company.

[14] The full court also upheld the court a quo’s finding that Mr du Plessis had
failed to prove the requisites of s 163(1) of the Act. As I have indicated, the full court
nevertheless went on to grant relief in terms of s 163(2) of the Act, holding that it
was duty-bound to design or craft a mechanism which would result in a 'clean break'
between the parties. It justified this approach on the ground that the relationship
between the parties had broken down irretrievably and that it was not in their best
interests to remain ‘in the same bed’.6 The full court thus directed Mr du Plessis to
purchase Ms Gent’s shares at a fair and reasonable value.

[15] As mentioned above, Mr du Plessis' application for special leave to
cross-appeal was refused by this court. This had a significant impact on the matter.
In Shatz Investments (Pty) Ltd v Kalovyrnas7 this court was confronted with the
question whether, without any cross-appeal, it could correct an order of a trial court
by making a prayer for interest, which that court had not granted. Trollip JA said the
following:

5 Mr du Plessis’ application for leave to appeal was dismissed by the court a quo on 27 May 2016. He thereafter
applied to this court for leave to appeal in terms of s 17(2)(b) of the Superior Courts Act 10 of 2013, which
application was granted on 13 September 2016.
6 See Du Plessis (above fn 3) para 67.
7 Shatz Investments (Pty) Ltd v Kalovyrnas 1976 (2) SA 545 (A).

‘…The court a quo did not award it, possibly because it was not claimed in the pleadings. But, be
that as it may, in the absence of any cross-appeal to correct the order of the court a quo to plaintiff’s
advantage and defendant’s detriment by including an award of such interest, we cannot deal with
it…’8

[16] This dictum reaffirmed trite principles. These are that a respondent in an
appeal may support the order appealed against on any ground that properly appears
from the record. In order to obtain a variation of the order, however, a respondent
must cross-appeal with the necessary leave, save perhaps in exceptional
circumstances where there is no prejudice to the appellant.

[17] The application of these principles to the present matter has the following
consequences. In the first instance, the option to liquidate the company is no longer
available. Importantly, what Mr du Plessis seeks is that instead of him buying
Ms Gent’s shares, which is what the full court ordered, she in fact be ordered to buy
his shares. It is clear from the record that the purchase price would be in the range
of R20 million to R35 million, an amount Ms Gent has clearly stated she could not
afford. Such a variation will, without a doubt, be to her detriment. Therefore, Mr du
Plessis was precluded from seeking an order that Ms Gent be directed to purchase
his shares. And, as I have said, Mr du Plessis expressly disavowed reliance on the
order that obliges him to purchase Ms Gent’s shares. It follows that, for this reason
alone, the appeal should succeed and the order of Hughes J should be reinstated. In
any event, for the reasons that follow, Mr du Plessis did not show oppressive or
unfairly prejudicial conduct on the part of Ms Gent.

8 Ibid at 560G-H.

[18] As stated already, Mr du Plessis relied in this court on the following grounds
in support for the relief he applied for as provided in s 163 of the Act:
(a)
Ms Gent had excluded him from the management of the company and refused
to provide him with management and financial information relating to the
company;
(b)
Ms Gent excluded him from any decision making within the company;
(c)
Ms Gent removed him as a director of the company and replaced him with her
husband and brother-in-law, and also unlawfully and unfairly dismissed him
from employment with the company.

[19] The full court upheld the finding of the court a quo that Mr du Plessis had
failed to demonstrate that Ms Gent's conduct towards him was oppressive or unfairly
prejudicial, or that his interests had been unfairly disregarded. It found that the
grounds relied upon by Mr du Plessis did not fall within the ambit of s 163(1) of the
Act.

[20] In my view, this finding by the full court cannot be faulted. It is bolstered by
the following objective facts:
(a)
Mr du Plessis was validly removed as a director of the company at a properly
constituted shareholders' meeting, and as provided in s 71 of the Act.
(b)
As a shareholder, Mr du Plessis is at liberty and entitled to the management
and financial information pertaining to the company as provided in s 26 of the
Act.

(c)
Mr du Plessis is entitled to dispose of his shares in the company in accordance
with the provisions of paragraph 11(d) of the Company's Articles of
Association.9
(d)
Mr du Plessis was dismissed after being found guilty of misconduct in a
disciplinary hearing. Clearly, the dismissal as general manager did not
constitute conduct that fell within the ambit of s 163(1).
(e)
In respect of the removal of Mr du Plessis as a director of the company, the
starting point is that the mere exercise of majority shareholding voting rights
does not amount to oppression. Counsel for Mr du Plessis fairly recognised
that for the removal as director to fall under s 163(1), Mr du Plessis had to
prove some agreement or understanding that he would be entitled to
directorship of the company. There was no proof of such agreement or
understanding. The objective facts indicated the converse. Mr du Plessis made
no capital contribution that could entitle him a seat on the board of the
company. Even though Mr du Plessis had received the bulk of his shares
during 1998, he was only appointed a director during 2012. Ms Gent
nominated him as director when she resigned as the sole director of the
company. Within a year, however, Ms Gent was reappointed and proceeded
to take steps to remove Mr du Plessis. Thus, he was permitted to be a director
only for the period of approximately a year.

9 Paragraph 11(d) provides that a shareholder, desirous of selling his or her own shares to any person other than a
member of his or her family, must:
'… first offer such shares in writing to any of the other shareholders of the company at a price to be agreed upon
between the shareholder desiring to sell and the other shareholder, but failing such agreement then at the same price
as may be bona fide obtained elsewhere by the shareholder proposing to sell. The price so obtainable elsewhere shall
be evidenced in writing by the prospective purchaser.'

[21] Viewed in the light of the above considerations, the full court clearly
misdirected itself in making the order that Ms Gent be ordered to sell her majority
shareholding to Mr du Plessis. It ought simply to have dismissed Mr du Plessis’
appeal. It follows, accordingly, that Ms Gent’s appeal must succeed.

[22] In the circumstances the following order is made:
(a)
The appeal is upheld with costs, including the costs of two counsel.
(b)
The order of the full court is set aside and substituted with the following:

‘The appeal is dismissed with costs.’

_________________
B H Mbha
Judge of Appeal

APPEARANCES

For First Appellant:
M P van der Merwe SC (with him N Komar)

Instructed by:

Waldick Jansen van Rensburg Inc., Centurion

Symington De Kok Attorneys, Bloemfontein

For Respondent:
B H Swart SC (with him R Oosthuizen)

Instructed by:

Jarvis Jacobs Raubenheimer Inc., Pretoria

Rossouw Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
24 December 2020
Status:
Immediate
Gent and Another v Du Plessis (1029/2019) [2020] ZASCA 184 (24 December 2020)

The following summary is for the benefit of the media in the reporting of this case and does
not form part of the judgments of the Supreme Court of Appeal

Today the Supreme Court of Appeal (SCA) handed down judgment in an appeal against a
decision of the Full Court of the Gauteng Division of the High Court, Pretoria (Botes AJ,
Mavundla and Mali JJ concurring), which involved an application for the winding up of a
company and, in the alternative, for relief from oppressive or prejudicial conduct under section
163 of the Companies Act 71 of 2008 (the Act). The SCA had granted the first appellant, Ms
Anita Julia Gent, special leave to appeal the order of the full court; and denied the respondent,
Mr Pieter Daniël Jacobs du Plessis, special leave to cross-appeal against that order.

The matter concerned the shareholding of Ms Gent and Mr du Plessis in the second appellant,
Bonnox (Pty) Ltd (the company). The company was established in 1957 by Ms Gent’s father
(Mr Schadewaldt), who was the majority shareholder and also the managing director until his
retirement in 2010. During 1994 Mr Schadewaldt transferred 15 shares in the company to Mr
du Plessis. In 1998 he transferred the rest of his shares in the company as follows: 80 shares to
Ms Gent; a further 45 shares to Mr du Plessis; and 10 shares to the company’s accountant, Mr
Smith. As a result of her majority shareholding, Ms Gent became the company’s sole director
until she resigned of her own accord on 18 January 2012. During 2012 Mr du Plessis also

acquired the shares of Mr Smith. Ms Gent and Mr du Plessis thus became the sole shareholders
in the company, Ms Gent holding 53.33 percent and Mr du Plessis the remaining 46.67 percent.
Ms Gent was re-appointed as a director of the company on 18 January 2013.

Mr du Plessis was employed by the company from 1986, where he started as a fitter and turner.
He was promoted to general manager during 2010 and, ultimately, was appointed as a director
during 2012, when Ms Gent resigned as such. He was, however, removed as a director at a
meeting of the shareholders on 6 March 2013. Mr du Plessis was subsequently suspended and,
after being found guilty on four counts of gross misconduct (one of which involved dishonesty)
at a disciplinary hearing, dismissed as an employee during August 2014. Amongst other things,
Ms Gent had uncovered that Mr du Plessis engineered a simulated transaction for his own
benefit and to the detriment of the company; and that he maliciously and surreptitiously
obtained an order placing the company in business rescue, one day before the shareholders’
meeting where a resolution for his removal as a director was to be tabled, in an attempt to avoid
his imminent removal.

On 30 June 2014, Mr du Plessis brought an application in the Gauteng Division of the High
Court for an order that the company be wound up on the basis that it was just and equitable. In
the alternative, he sought an order directing Ms Gent to purchase his shareholding in the
company at a price to be determined by an independent expert. The alternative relief was sought
on the basis of Mr du Plessis’ allegation that Ms Gent, in her capacity as the majority
shareholder and director of the company, had acted in an unfairly prejudicial and oppressive
manner towards him.

The court a quo (Hughes J) dismissed the application with costs on 30 March 2016. It found
that although the relationship between the two shareholders had broken down irretrievably, and
was not capable of being resolved, there was no deadlock that rendered it just and equitable to
wind up the company. It was Mr du Plessis’ own conduct that caused the breakdown in the
shareholders’ relationship and he was thus furthermore precluded from relying on the just and
equitable ground by the doctrine of unclean hands. In respect of the relief sought under section
163, Mr du Plessis had not established the requisites for that section to be invoked: neither his
alleged loss of confidence in the manner in which the company’s affairs were being conducted,
nor his resentment at having been outvoted, fell within the purview of s 163 of the Act.

Mr du Plessis appealed to the full court which, on 18 April 2019, upheld the court a quo’s
finding that Mr du Plessis had failed to prove the requisites of s 163(1) of the Act and
consequently dismissed the appeal. It nevertheless went on to grant relief in terms of s 163(2)
of the Act, holding that it was duty-bound to design or craft a mechanism that would result in
a 'clean break' between the parties. It justified this approach on the ground that the relationship
between the parties had broken down irretrievably and that it was not in their best interests to
remain ‘in the same bed’. The full court accordingly directed Mr du Plessis to purchase Ms
Gent’s shares at a fair and reasonable value.

On appeal to the SCA it was held that, due to his application for special leave to cross-appeal
having been refused, Mr du Plessis was precluded from obtaining a variation of the order of
the full court. The SCA confirmed Appellate Division authority for the point that, in the
absence of a cross-appeal, a respondent is not entitled to an advantageous variation of the order
of the court below, save perhaps for exceptional circumstances where there is no detriment to
the appellant.

This was not without significant ramifications. For one, the option to liquidate the company
was no longer available. Secondly, what Mr du Plessis sought was, instead of him buying Ms
Gent’s shares, which is what the full court ordered, that she in fact be ordered to buy his shares.
However, Ms Gent had already indicated that this was not within her means and it was clear
that such a variation would undoubtedly be to her detriment. Mr du Plessis was therefore
precluded from seeking an order that Ms Gent be directed to purchase his shares and, on this
ground alone, the appeal was good. The SCA nevertheless found that Mr du Plessis had failed
to show oppressive or unfairly prejudicial conduct on the part of Ms Gent, as the full court had
found, and bolstered this finding with objective facts. The SCA concluded that the full court
had clearly misdirected itself in making the order that Ms Gent be ordered to sell her majority
shareholding to Mr du Plessis.

In the result, the appeal was upheld with costs, including those of two counsel. The order of
the full court was set aside and the order of the court a quo (Hughes J) reinstated.
________________________________________