Watson NO v Ngonyama and Another

Ngonyama, Macingwane and Watson agreed to participate equally in an investment structure ultimately holding shares in Ntsimbintle Mining (Pty) Ltd. To meet BBBEE objectives, they agreed that part of their shareholding would be donated to an empowerment vehicle. Shares were donated to Bosasa Youth Development Centres (Pty) Ltd, which indirectly (and later directly) held 5.1% of Ntsimbintle. Years later, Ngonyama alleged that the donation was induced by Watson’s misrepresentation that Bosasa Youth was genuinely BBBEE-compliant and that historically disadvantaged persons would benefit. He claimed to have discovered in 2017 that Bosasa Youth was wholly controlled within the Bosasa corporate group and ultimately by Watson and his family. Ngonyama and his company, Thunder Cats, sought restoration of the donated shares and dividends, alleging misrepresentation. Proceedings were brought by motion against Watson and Bosasa Youth; however, the claim against Bosasa Youth was withdrawn and entities alleged to be beneficial shareholders were not joined.

The appeal was upheld with costs, including the costs of two counsel. The high court’s order was set aside and replaced with an order dismissing the application with costs, including the costs of two counsel.

The case underscores the strict requirements for joinder, executability of orders, and appropriateness of motion proceedings in complex company-law disputes. It reinforces principles of corporate separateness and cautions against granting far-reaching relief based on disputed allegations of control and misrepresentation, particularly in BBBEE-related shareholding structures.