In re apco liquidating trust


In particular, the state of animosity precluded all reasonable hope of cooperation in the attainment of the company's financial goals.appropriately capture the problem of deadlock.The somewhat simple question confronting Ponnan JA was whether the first appellant, Apco Africa (Pty) Ltd ("the Company"), ought to be wound up on the ground that this course was just and equitable within the meaning of section 344(h) of the old 61 of 1973, or more accurately, whether such an order was properly granted by the court below.The strain on the parties' relationship intensified as time went on.The obstructive conduct of both sides did little to help the situation.The shareholder agreement could not provide a resolution to the stalemate as there was no deadlock breaking method such as the Texas Auction clause.



However, the evidence showed a justifiable breakdown of mutual trust and confidence between the shareholders regarding the conduct and management of the company's affairs.The analogy to this could be found in the familiar questions which English and other Commonwealth courts have grappled with for decades. that will lead to a finding that it is just and equitable to wind up the company because of deadlock are: there are no other effective and appropriate remedies; there is an equal split or nearly equal split of shares and control; there is a serious and persistent disagreement as to some important questions respecting the management or functioning of the corporation; there is a resulting deadlock; and the deadlock paralyzes and seriously interferes with the normal operations of the corporation. The shareholder relationship was strained from the moment the respondents gave notice of their intention to extricate themselves from Nkonjane.They could not do so because the provision in the shareholder agreement dealing with the disposal of shares required that all other shareholders consent thereto in writing.In its application, the just and equitable ground does not admit of a strict categorical approach.

As Ponnan JA observed in "there is no necessary limit to the words 'just and equitable"'.

The parties disagreed from the outset on important corporate decisions and Arcay's response to matters relating to performance and accountability.