Re: Defective-procedure & estoppel & quasi-partnerships

OP cited extract of law report:
BEN-TOVIM v BEN-TOVIM AND OTHERS 2001 (3) SA 1074,
where it was reported that [now divorceing] hysband & wife owned
50% each in private company, and he manipulated her into a minority
position and together with the extra/new shareholder out-voted her.
Her application to the S.African court for relief was refused, on the
well known Foss v Harbottle principles of UK law, where SA follows,
with some years lag the UK commercial law.  OTOH, UK & commonwealth
jurisdictions have accepted the 'quasi partnership principle', which 
applies to small, closely-held, especially by family members, PRIVATE
companies.  Since one recent case in S.Africa succeeded on these grounds,
the OP contends that the BEN-TOVIM application whould have succeeded
too if the applicant's attorney had known of the 'quasi partnership principle'.
OP now asks if the applicant is barred from re-applying, and has she lost
her assets forever, by a principle of estoppel/res-judicata ..eg. ?
PS. in a private company, the minority can legaly be deprived of all
value by the majority extracting all profit as directors' fees.

  nospam@isp.com wrote:-
>  You also effectively indicate  by your references to some decided cases 
>  which  would have tried to import "quasi-partnership" principles into 
>  the corporate context despite evidently still more or less generally
>  prevailing judicially construed/applied law in your country which,
>  so far, has mostly rejected such arguments when attempted.
  
Not exactly. My observation is that when the shareholders ARE
effectively a partnership, eg. a few family members, then with
my jurisdiction catching up to UK company law cases, the "quasi
partnership" principle WOULD be applicable, if it was know about
and given as grounds for relief.
And in the ONE only recent specific case that I quoted, it HAS been
applied:  HULETT AND OTHERS v HULETT 1992 (4) - 291  APPELATE DIVISION

If you could provide evidence of one single case where the
quasi-partnership" principle was alledged and rejected, here, that
would be of great value to me.

Here's further extracts of my-local law-reports refering to the quasi
partnership principle: --------

] MELVIN PETER PAARWATER v SOUTH SAHARA INVESTMETNS (PTY) LTD
] Supreme Court of Appeal   091642/20042
] Summary: When is it just and equitable to wind up a company in 
] terms of  s 344 (h) of the Companies Act 61 of 1973, as amended? 
  {and s 344 (h) reads:
344.   Circumstances in which company may be wound up by Court.
	(h)	it appears to the Court that it is just and equitable that the
company should be wound up. }

] Mr Paarwater stated, amongst other matters, that he and Mr Bothma, who 
] are the only directors of the company, are at loggerheads and that mutual 
] trust and confidence between them had broken down. He also accused 
] Mr Bothma of misappropriating funds of the company and of wrongly 
] removing his name as one of the signatories to the company's bank 
] account. All these allegations were denied by Mr Bothma.
] 
] After a careful analysis of all of Mr Paarwater's allegations and 
] Mr Bothma's explanations the High Court found that Mr Paarwater had 
] failed to establish, upon a balance of probabilities, as he was obliged 
] to do, that it was indeed just and equitable to wind up the company.
] 
] The Supreme Court of Appeal in considering Mr Paarwater's appeal to it, 
] again examined all of the evidence and the arguments advanced by the 
] parties and concluded that the High Court had correctly refused to 
] confirm the provisional winding up order.
] --------------
] 5.8	On 2 March 2002 they also entered into a shareholders' agreement. 
] Clause 2.2 of the agreement states that the parties `wish to record in 
] writing the terms and conditions applicable to their relationship as 
] shareholders in the Company...' In clause 23 it is specifically recorded 
] that the `agreement does not constitute a partnership.'
] --------
] [6]	The appellant contends that the respondent is a domestic company  
] or quasi-partnership and falls to be liquidated due to the complete 
] breakdown of the relationship of reasonableness, good faith, trust, 
] honesty and mutual confidence which should exist between the appellant 
] and the respondent's other director and representative of its only other 
] shareholder at the time, Bothma. It is upon this essential basis, relying 
] on cases where domestic companies which were in reality partnerships 
] or quasi partnerships, that the applicant founds his argument that it is 
] `just and equitable', in the particular circumstances, to wind-up the 
] respondent. (See for example well-known cases such as Moosa  v Mavjee
]  Bhawan (Pty) Ltd and Another, Ebrahimi v Westbourne Galleries Ltd, 
] Lawrence v Lawrich Motors (Pty) Ltd and Marshall v Marshall (Pty) Ltd 
] and Others) This allegation is denied by the respondent in an affidavit 
] deposed to by Bothma. More particularly Bothma states as follows in this 
] regard:
] 
] `I should point out further that the relationship between myself and the 
] applicant was not for all times relevant hereto in the nature of a 
] partnership. We only started doing business together in about February 
] 2002. Prior to that date we had never met each other and neither had we 
] had any business dealings. The venture we entered into was purely that of 
] co-directors and co-shareholders in a business to try to get a large beef 
] processing business off the ground. It is so that we worked together as 
] co-entrepreneurs, shareholders and directors of the various entities 
] involved in the project. But we did not act as partners. 
----------

Q - do you agree that by denying that a partnership effectively existed,
they are implying that the 'quasi-partnership-PRINCIPLE' applies ?

> In addition to your omission of enough factual information to enable
> evaluating meaningfully how merited or not such an argument might 
> have been in the case at issue if collateral estoppel or like principles
> did not preclude its being made, your comments in this thread
> therefore prevent concluding that the absence of an attempted
> "quasi-partnership" argument had any effect whatever on the litigant's
> not prevailing although, again, it is at least speculatively possible
> that. if you had provided more of the factual context (which, as
> usual, you more or less unremittingly avoided doing), you possibly
> might have facilitated further analysis and perhaps even warranted a
> different conclusion in this connection.

What, for example, further factual context could you need.
I've only got the law reports, which are not verbose like you are.
Neither are the statutes verbose.
When brief facts match the brief corresponding statute, what 
more can you want ?

> The second element relates to Q.A(b) and Q.A(c) above, i.e., your
> postulating that this person may be "screwed for life" because her
> attorney possibly committed malpractice or because the 
> judicial/legal system itself in ways distinguishable from only one 
> individual attorney's deficiency caused this result.

 Well, I don't believe they call 'ignorance of subtleties', "malpractice",
here, and I find it difficult how they could even in the US.
Eg. after having access to ample description in the record, the judge
still had to ask me 'how could each share of my minority be worth
less than a share of the mother and daughters majority combination'.
After I briefly tried to explain the difference beween pro-rata and
majority-rule/winner-takes-all, I had no proof if/that he understood,
because as previously noted, one can't ask.
So if the judge didn't know, how can the attorney be mal-practicing
by ignorance.  And yesterday at the library, I again analysed the 
local 'company law by cases' texts: they all just parrot the statutes,
whithout any suble insight. Most law-people are just rule-clerks.

>      Re. Q.A(c), if you had provided information that would enable
> (or, indeed, that possibly might even have required) concluding that
> the attorney "screwed [up]" in some significant way, the client 
> would not necessarily be "screwed for life" if, acting in timely and
> otherwise effective manner, she sued that attorney then proved the
> commission of  malpractice to the damage causing extent you presume
> whereupon the system, as such, might well have provided a remedy (as
> certainly meanwhile providing an opportunity to seek such a remedy).

How the hell could she know about "quasi-partnership" principles,
when even her attorney didn't.         You want concrete:-
I got an evaluation of my situation by the most prestigious law firm, 
paid for by the company, to evaluate the majority's shareholders 
agreement proposal.  The expensive written opinion, which I used
in court to confirm that I had no protection under the current 
company law, and therefore was seeking protection under 'law
related to wills', was just plain naive text-book paraphrasing.

Since I've got it ON RECORD, can you claim that I could sue for
malpractice ?!   Perhaps you're confusing statute with case law ?
The attorney/law-clerk is negligent by not failing to apply the
plain statutes; but he's not expected to know all case-law ?

> But insofar as the primary question you appear to pose here is
> concerned -- i.e., in what sorts of cases/circumstances after the
> conclusion of a civil trial should "estoppel" or like principles bar a
> litigant from making some equitable or legal argument for the first
> time on appeal or otherwise in later attempted judicial proceedings
> arising from the same transactions/occurrences as first sued upon? --

Yes, exactly, except IMO time constraints would bar an appeal ?
So she would have to make a new application ?

> the in this connection probably most important fact to consider is
> that no legal system in the world purports (or, if  rational and
> reasonable, could or should purport) to guarantee what might be 
> termed "perfect justice" in all cases.

Q - do you know about Indian law [based on UK common law]
 where cases reportedly go on for generations; and does this not
contradict your claim that in general a nd also in S.Africa the quick 
one chance hearing applies ?

How does 'land claims after decades' fit your idea ?
Do you know about

| [No. 28141. En Banc.          Supreme Court          July 18, 1941.]
| 
| JOHN SANDGREN, Respondent, v. HARRY T. WEST,
|                    Defendant, HAZEL WEST, Appellant, THE NATIONAL
|                               BANK OF COMMERCE OF SEATTLE,
?

-----------
I suspect here's a further suble principle, which we're missing, altho' 
as my attorney you could NOT be therefore accused of malpractice:
{which is also central to the difference between the municipal authority
and a property holder dispute -- they can't disengage}
a major function of the law must be to allow combatants to disengage:
if I steal your money and run away, the principle of LOS makes sense.
But if we're tied together by a partnership or similar relationship,
it becomes necessary to apply methods to allow a disengagement.

Which now throws light on decissions which I previously didn't fully
appreciate. Eg in BEN-TOVIM v BEN-TOVIM AND OTHERS 2001 (3) 
]D: Court has discretion to refuse relief even if shareholder satisfied 
]requirements of ss (1) -- Not just and equitable to parties if relief 
]sought  would not bring to an end matter complained of.
  
Can you confirm that a decision should potentially resolve the dispute,
for which relief is sought; and can you refer to authorities ?

Thanks for any feedback,

== Chris Glur.