Barry v Clearwater Estates NPC and Others (187/2016) [2017] ZASCA 11; 2017 (3) SA 364 (SCA) (16 March 2017)

Barry v Clearwater Estates NPC and Others (187/2016) [2017] ZASCA 11; 2017 (3) SA 364 (SCA) (16 March 2017)

The Supreme Court of Appeal held that section 58(1) of the Companies Act 71 of 2008 is an unalterable provision granting shareholders the right to appoint a proxy at any time. The MOI articles requiring proxies to be deposited not less than 48 hours before a meeting are inconsistent with this statutory right and are void in terms of section 15(1) of the Act. The distinction drawn by the appellant between the appointment and exercise of a proxy is artificial; the statutory purpose of proxy appointment is to enable participation in meetings, and any time bar that thwarts this purpose invalidates the appointment itself. The legislative change from the previous Act, which allowed a 48-hour...

Citation
[2017] ZASCA 11
Parties
Appellant: Richard Du Plessis Barry; Respondent: Clearwater Estates NPC (Clearwater Estates Homeowners Association); Respondent: Kevin Olivier (Chairperson); Respondent: Commissioner of Companies and Intellectual Property Commission
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
16 March 2017
Case Number
187/2016
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal dismissed with costs.
Judges
Leach, Willis, Swain, Mbha, Schippers
Legal Topics
Companies Act 71 of 2008, Memorandum of Incorporation, Proxy Appointment, Shareholder Rights
Commercial and Corporate Companies Act 71 of 2008 Memorandum of Incorporation Proxy Appointment Shareholder Rights

Case Brief

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Parties

Richard Du Plessis Barry

Appellant

Clearwater Estates NPC (Clearwater Estates Homeowners Association)

Respondent

Kevin Olivier (Chairperson)

Respondent

Commissioner of Companies and Intellectual Property Commission

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether articles 13.7.10 and 13.7.11 of the Memorandum of Incorporation (MOI) requiring proxies to be deposited not less than 48 hours before a meeting are inconsistent with section 58(1) of the Companies Act 71 of 2008.
  2. 2 Whether the resolutions passed at the special general meeting held on 27 September 2014 are valid given the late submission of proxies.
  3. 3 Whether the MOI can validly restrict the time for appointment and exercise of proxies contrary to the Act.

Ratio Decidendi

The Supreme Court of Appeal held that section 58(1) of the Companies Act 71 of 2008 is an unalterable provision granting shareholders the right to appoint a proxy at any time. The MOI articles requiring proxies to be deposited not less than 48 hours before a meeting are inconsistent with this statutory right and are void in terms of section 15(1) of the Act. The distinction drawn by the appellant between the appointment and exercise of a proxy is artificial; the statutory purpose of proxy appointment is to enable participation in meetings, and any time bar that thwarts this purpose invalidates the appointment itself. The legislative change from the previous Act, which allowed a 48-hour...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.