Brothers in ding-dong battle over dairy fortune
Judge says the scrap over Douglasdale is costly trench warfare
● Two brothers who inherited a flourishing dairy farm will come face to face in the High Court in Pretoria tomorrow in the latest round of lengthy litigation that one judge has described as “costly trench warfare”.
Rowan and Michael Matthews have been locked in legal action for several years over the 70-year-old Douglasdale Dairy.
This week Rowan’s lawyers — who have accused Michael of stealing R2-million from the family trust — will attempt to have Michael declared a delinquent director.
Michael believes the latest action is a bid to “strong-arm and intimidate” him into selling his 50% shareholding at a fraction of its value.
Douglasdale Dairy, in Johannesburg, produces 1.5% of the country’s total daily milk. It services the greater Gauteng and distributes in North West and Mpumalanga.
The brothers’ father, Brian Matthews, bought the property and the Douglasdale Dairy in 1957. He died in January 2000, leaving the land to his wife, Elizabeth Bragge, and the dairy to his sons.
Michael, who lives in White River in Mpumalanga, is involved in music and education development. Rowan has emigrated to Australia but returns to South African frequently on business.
This week the Supreme Court of Appeal ruled in another matter involving the brothers. In 2013 their mother applied to have the dairy evicted. Her action is believed to have been spurred by the feud between her sons. She died in 2016 before a ruling was made.
In his judgment, SCA Acting Judge Dennis Davis said: “A family feud can often defy all laws of rationality. Invariably the warring parties consider that if they are able to mass superior legal forces to those of their family rivals they will emerge victorious. Sadly, litigation of this kind invariably ends in costly trench warfare and with no sensible resolution in sight.”
Davis ruled that the eviction order could not be enforced because of Bragge’s death.
Maurice Crespi of Schindlers Attorneys, who represents Michael, told the Sunday Times that in the years leading up to 2013, the shareholder dispute worsened.
“The late Mrs Bragge viewed the situation with distress. As owner of the property on which Douglasdale Dairy operates . . . Bragge informed the board that if the fraternal dispute was not resolved to her satisfaction, she would refuse to renew the lease, which meant Douglasdale Dairy would be an unlawful occupier.”
Michael is a 50% shareholder in a holding company named Merb, which owns 100% of the issued share capital. Rowan owns the remaining 50% of Merb through a company called Wauchope.
In 2016, Rowan launched two actions against Michael, seeking to declare him a delinquent director and revoke what Rowan says was a donation by him of almost 14% shareholding in Merb to Michael.
Michael disputed any such transfer.
“My client’s view of the entire consolidated trial is that it is abuse, designed by Rowan and his legal team only to strong-arm and intimidate him into parting with his 50% shareholding at a fraction of its true value,” Crespi said.
Rowan has also accused Michael of stealing R2-million from the trust.
Michael, while disputing the allegation, has offered to pay R40 000 to the trust, according to court papers.
“The payment was inadvertently made to [their sister] Helen in 2015. The funds have at all times otherwise been utilised for the purpose of the trust, for example for Bragge’s cancer treatment and her grandchildren’s education,” said Crespi.
Michael’s request that Rowan set down R500 000 as security deposit for the litigation was turned down by Judge Ntendeya Mavundla in the High Court in Pretoria in February. Mavundla said the application “reveals the strained relations between two brothers over a golden nest their late father left them, in the form of a family trust”.
Rowan’s lawyer, Michael Hellens SC, said he had advised his client not to comment on the case in the media.