Moyo v Old Mutual Ltd and Others (22791/2019) [2022] ZAGPJHC 336; [2022] 3 All SA 795 (GJ) (16 May 2022)

Key Facts

Issues

• Whether the respondents' refusal to allow Mr. Moyo to resume duties (the 'lockouts') in defiance of court orders constituted contempt of court.
• Whether the Directors' association with and defense of Mr. Manuel's public statements criticizing Judge Mashile's judgment amounted to 'gross negligence, wilful misconduct, or breach of trust' under section 162(5)(c)(iv)(aa) of the Companies Act and section 162(5)(c)(i) for Mr. Manuel.
• Whether the Directors' second termination of Mr. Moyo's employment in August 2019, without a hearing, constituted 'gross negligence, wilful misconduct, or breach of trust' under section 162(5)(c)(iv)(aa) of the Companies Act.
• Whether the declaratory relief based on section 165(3) of the Constitution, seeking to declare the Directors in breach of the Constitution, is part of the issues in the contempt application.
• Whether the respondents' refusal to allow Mr. Moyo to resume his duties after Judge Mashile's orders constituted contempt of court for non-compliance with court orders dated 30 July 2019.
• Whether the Directors' suspension of Mr. Moyo without just cause or hearing constituted 'gross negligence, wilful misconduct, or breach of trust' under section 162(5)(c)(iv)(aa) of the Companies Act.
• Whether, if contempt of court is established, a further hearing on the appropriate sanction is necessary.
• Whether the respondents' actions after the 6 September 2019 court order, which reaffirmed the reinstatement, constituted contempt of court for non-compliance.
• Whether the Directors' public statements, particularly by Mr. Manuel, subsequent to Judge Mashile's orders, amounted to the offense of scandalizing the court.
• Whether Mr. Moyo is limited to the issues in paragraph 10 of his replying affidavit (the 'big five') or if all 11 grounds in his founding affidavit should be considered in the delinquency application.
• Whether paragraphs 6, 23.4–23.6, 47–59, 63–73, 75–77, 199, 203, 257, 270.4–270.7, 270.10–270.11, and 276 of the applicant's further replying affidavit should be struck out due to procedural inadequacies.
• Whether the Directors' termination of Mr. Moyo's employment in June 2019, without a hearing and despite accusing him of misconduct, amounted to 'gross negligence, wilful misconduct, or breach of trust' under section 162(5)(c)(iv)(aa) of the Companies Act.

Holdings

• The court dismissed both the contempt and delinquency applications, finding no contempt of court or delinquency by the directors.
• Certain paragraphs from the applicant's replying affidavit in the contempt application were struck out.
• The applicant was ordered to pay costs, including the costs of two counsel where applicable.

Remedies

• The court dismissed the contempt application, which alleged that Old Mutual and its directors had committed contempt of court, with full costs. This included the costs of two counsel if they were employed in the matter.
• The court ordered the striking out of specific paragraphs from the applicant's further replying affidavit in the contempt application, including sections 23.5, 63.10, 64-73, 199.2, 257, 270.4, 270.7, and 270.10-11. The applicant was also ordered to pay the costs of this application, including counsel fees.
• The court dismissed the delinquency application, which sought to declare the directors of Old Mutual as delinquent, with full costs. This included the costs of two counsel if they were employed in the matter.

Legal Principles

• The Plascon-Evans rule was applied to uphold the respondents' pleadings as true unless proven fictitious or uncreditworthy, affecting the admissibility of new evidence in reply.
• In contempt proceedings, the applicant must prove non-compliance, wilfulness, and mala fides beyond reasonable doubt. The respondents' reliance on legal advice shifted the burden to establish reasonable doubt about their bona fides.
• The Appeal Court's decision on Judge Mashile's order was binding, deeming the interim order never to have existed, which affected the legality of subsequent actions by the respondents.
• The court applied the 'beyond reasonable doubt' standard for contempt, requiring conclusive proof of unlawful conduct before incarceration as a last resort.
• The court emphasized that directors must act in good faith, for a proper purpose, and in the best interests of the company under section 76 of the Companies Act. A breakdown in trust and confidence between the board and CEO justified termination.

Precedent Name

• Maccsand CC v Macassar Land Claims Committee and Others
• S v Mamabolo
• Fakie NO v CCII Systems (Pty) Ltd
• Moyane v Ramaphosa
• Gihwala and Others v Grancy Property Ltd
• R v Alexander and others
• Secretary of the Judicial Commission of Inquiry v Zuma
• MV Snow Delta Serva Ship Ltd v Discount Tonnage Ltd
• S v Hugo
• Old Mutual Limited & Others v Peter Moyo

Cited Statute

• Constitution of the Republic of South Africa
• Companies Act 71 of 2008
• Superior Courts Act 10 of 2013
• Protected Disclosures Act 26 of 2000 (as amended)
• Labour Relations Act

Judge Name

• Ingrid Opperman
• Joseph Raulinga
• Mpostoli Twala

Passage Text

• The reasons for the breakdown, from a continuation as a CEO of Old Mutual's perspective and considering the interests of the company, thus become irrelevant. Mr Moyo had to leave.
• We find the conduct of the Directors not only to be lawful, but also not delinquent.
• We thus conclude that each one of the lockouts was the product of good faith legal advice. In view of such finding, we need not consider the legality of the lockouts but do so nonetheless.