Louis Case Reports

PIERCING THE CORPORATE VEIL

Company – Director liability – Piercing the corporate veil – Misrepresentations regarding vehicle sold at auction – Judgment obtained against company – Director’s conduct – Personally liable – Companies Act 71 of 2008, s 20(9).
Kolisang v Alegrand General Dealers [2022] ZAGPJHC 431 at [11]-[31]

Ms Kolisang attended a public auction arranged by Alegrand at its premises where she purchased a vehicle described as a 2012 Golf GTI motor vehicle for R177,560. She later cancelled the sale agreement and returned the vehicle when she discovered that it was actually a 2010 model. The company refused to refund the purchase price and she obtained default judgment. She has travelled a long road in trying to execute against the judgment, during which it was discovered that the director, Mr Jassat, had resigned as director and that the business address of the company changed. Ms Kolisang now approaches the court to pierce the company veil and obtain relief against Mr Jassat for the judgment debt granted against the company.

Nichols AJ discusses section 20(9) of the Companies Act 71 of 2008; Ms Kolisang’s contention that the director represented the company at all material times and he specifically represented that the motor vehicle was as described; that the director averred that he sold the company and that a clause of the agreement provided for his indemnification; section 76(3) of the Act and a director’s fiduciary duties; the requirement for piecing the corporate veil of an unconscionable abuse of the juristic personality of a company as a separate legal entity; and fraud and the improper use of a company or conduct of the affairs of a company. The court finds that the misrepresentation by the director was fraudulent, alternatively dishonest or improper conduct and it was intended to induce the applicant to purchase the motor vehicle. The director conducted himself in a manner that was not in the best interest of the company, but rather designed to protect himself from personal liability.

It is declared that Alegrand General Dealers and Auctioneers (Pty) Ltd shall be deemed not to be a juristic person, but a venture of Mr Jassat personally, in respect of  its obligations to Ms Kolisang pursuant to the judgment. Mr Jassat is declared personally liable for the judgment debt of R177,560.

ORAL AGREEMENT – OSTENSIBLE AUTHORITY – ESTOPPEL

Contract – Oral agreement for supply of material and rendering of services – Resolving factual disputes – Proper, contextual and purposive interpretation of agreement – Conduct of contracting parties before, after and during agreement instructive – Estoppel and ostensible authority – Direct authority found, as well as ostensible authority – Estoppel also applicable.
ANC v Ezulweni Investments [2022] ZAGPJHC 419at [24]-[45]

Prior to the 2019 national elections, the CEO of Ezulweni Investments did a presentation at the ANC headquarters at Luthuli House for the supply of branded goods for their election campaign. Ezulweni provided a quote and later Messrs Mabaso and Nkholise from the ANC placed an order with Ezulweni to supply the ANC with 30,000 PVC banners, which Ezulweni agreed to supply and install on street poles and at polling stations, and remove after the elections. Ezulweni carried out the work and the supply. After non-payment by the ANC it obtained judgment in the High Court against the ANC for over R100 million, which the ANC now appeals against. The ANC contends that the contract was invalid because of non-compliance with the requirements of the internal supply chain policy. It further contends that the contracting officials (Messrs Mabaso and Nkholise) had no authority to bind it.

Adams J discusses the letter provided to Ezulweni on a formal ANC letterhead and signed by the head of elections, Mr Fikile Mbalula; the invoices submitted; a letter from Mr Mbalula to Mr Paul Mashatile; the Whatsapp messages; that the ANC had never disputed its indebtedness to Ezulweni, whether it be in discussions, conversations or meetings with Messrs Mabaso and Nkholise, or in correspondence addresses by them to Ezulweni; and whether an oral agreement was concluded for the banners at an agreed fee of over R100 million. The High Court was correct in its finding that the ANC was liable to Ezulweni on the basis of an oral agreement concluded between them. And further, the appeal stands to be dismissed on the basis of estoppel and ostensible authority. The statements and conduct, including omissions, of the ANC, its elections head, Messrs Mabaso and Nkholise, reasonably conveyed to a person in the position of Ezulweni, that Messrs Mabaso and Nkholise had the necessary authority. The appeal is dismissed.
(Makume J and Twala J concurred.)

DISMISSAL AND CANNABIS USE

Alcohol and substance abuse policy – Zero tolerance – Repeatedly failing cannabis tests – Medicinal and recreational use of cannabis – Alleged unfair discrimination – Claims of discrimination and automatically unfair dismissal dismissed.
Enever v Barloworld Equipment [2022] ZALCJHB 161 at [17]-[47]

Ms Enever worked for Barloworld since 2007 with an unblemished record in an office position which did not involve heavy machinery or driving vehicles. She suffered from migraine and anxiety and for this took medication of about 10 pills a day. Following the Prince Constitutional Court case which decriminalised the use of cannabis, she weaned herself off the pills and instead used cannabis oil and smoked rolled cannabis as an alternative to achieve the same results. Ms Enever used cannabis recreationally by smoking rolled cannabis every evening to assist with insomnia and anxiety. This also improved her bodily health, outlook and her spirituality. She was dismissed for repetitively testing positive for the cannabis drug and being in breach of the company’s Alcohol and Substance Abuse Policy. She claims unfair discrimination in terms of section 6(1) of the Employment Equity Act 55 of 1998 and automatically unfair dismissal in terms of section 187(1)(f) of the Labour Relations Act 66 of 1995.

Ntsoane AJ discusses the Employment Equity Act and unfair discrimination; the company’s safety rules and Alcohol and Substance Abuse Policy with a “zero tolerance” approach; whether there was differentiation between Ms Enever and other employees; that she was aware of the policy and that other employees who tested positive for alcohol and substances were treated the same way; that Ms Enever consumed cannabis after hours and at home; that cannabis may remain in the bloodstream for days so Ms Enever as a chronic user will never test negative; the fact that one is not impaired to perform duties does not in itself absolve that employee from misconduct in terms of the employer’s policy; that Ms Enever did not present proper medical evidence and the difficulty in drawing the line between medicinal and recreational use of cannabis; that the chairperson of the disciplinary hearing correctly found that a final written warning would serve no purposes for someone who made it clear that she will not stop consuming cannabis.
The claims of discrimination and automatically unfair dismissal are dismissed.

ABOUT THE EDITOR

Louis Podbielski spent ten years at Juta working on various law reports and has read many thousands of judgments for case selection. He has considerable experience in writing flynotes and headnotes, compiling case annotations, and in refining subject indexes.​ During his four years at LexisNexis he was involved with legal data, analytics and in developing various legal tech solutions. He now runs his own case law service Louis Case Law

You can read his full CV and more about Louis on his LinkedIn profile where he shares interesting and recent cases.

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