HLB International (South Africa) (Pty) Ltd v MWRK Accountants and Consultants (Pty) Ltd

MWRK Accountants and Consultants (Pty) Ltd held 49% of the shares in HLB International (South Africa) (Pty) Ltd, a property-holding company, while Par Excellence Finance and Leasing (Pty) Ltd (PE) held 51%. HLB owned an immovable property in Benoni which was leased to Certified Master Auditors Inc (CMA). Following a breakdown in the relationship between the parties, MWRK sought equitable relief in the High Court under sections 81(1)(d)(iii) and 163 of the Companies Act 71 of 2008, alleging unfairly prejudicial conduct. The High Court refused to wind up HLB but ordered that the property be sold and the net proceeds distributed pro rata between the shareholders. A dispute subsequently arose as to whether the court order required the property to be sold subject to the existing lease or free of it. MWRK brought a further application seeking clarification and correction of the order to state expressly that the sale must be free of any lease. The High Court granted the clarification. HLB appealed against that second order to the Supreme Court of Appeal.

The appeal was dismissed with costs, subject to a variation of the High Court’s second order. Paragraph 3 of the High Court’s order was set aside and replaced with an order that the costs of the correction application be paid by the first respondent.

The case is significant for reaffirming and consolidating South African law on the interpretation, clarification, and correction of court orders. It illustrates the application of Rule 42(1)(b) and the common-law exceptions to the functus officio doctrine, emphasising that courts may correct patent omissions to give effect to their true intention in the interests of justice.