BNS Nominees (RF) (Proprietary) Limited and Another v Arrowhead Properties Limited and Another (19/39482) [2023] ZAGPJHC 37; 2023 (6) SA 441 (GJ) (24 January 2023)

BNS Nominees (RF) (Proprietary) Limited and Another v Arrowhead Properties Limited and Another (19/39482) [2023] ZAGPJHC 37; 2023 (6) SA 441 (GJ) (24 January 2023)

The court held that the applicants did not make out a factual case in their founding papers for an interest rate based on the Capital Asset Pricing Model or for compounding. The only rate pleaded was the prescribed legal rate, and the factual basis for a higher rate or compounding was not established. The determination of a reasonable rate of interest is a factual issue that must be pleaded and supported by evidence, not raised for the first time in heads of argument. Arrowhead did not make out a factual case for denying interest based on the applicants' conduct. The court exercised its discretion to award interest at the prescribed legal rate, without compounding, for the period from 23...

Citation
[2023] ZAGPJHC 37
Parties
Applicant: BNS Nominees (RF) (Proprietary) Limited; Applicant: Breede Coalitions (Proprietary) Limited; Respondent: Arrowhead Properties Limited; Respondent: Affected Dissenting Shareholders
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
24 January 2023
Case Number
19/39482
Procedural Posture
Civil Application / Application to Vary Judgment Under Rule 42(1)(b) Regarding Interest Award
Outcome
Application to vary the judgment granted. Interest awarded at the prescribed legal rate, without compounding, from 23 September 2019 to the date of payment. No order as to costs.
Judges
N Manoim
Legal Topics
Appraisal Rights, Companies Act Section 164, Interest on Judgment Debt, Court Discretion, Rule 42 Variation
Commercial and Corporate Appraisal Rights Companies Act Section 164 Interest on Judgment Debt Court Discretion Rule 42 Variation

Case Brief

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Parties

BNS Nominees (RF) (Proprietary) Limited

Applicant

Breede Coalitions (Proprietary) Limited

Applicant

Arrowhead Properties Limited

Respondent

Affected Dissenting Shareholders

Respondent

Procedural Posture

Civil Application / Application to Vary Judgment Under Rule 42(1)(b) Regarding Interest Award

Legal Issues

  1. 1 Whether the applicants are entitled to interest on the fair value of their shares under section 164(15)(c)(iii)(bb) of the Companies Act.
  2. 2 How the court should determine a 'reasonable rate of interest' for dissenting shareholders.
  3. 3 Whether interest should be compounded or simple.

Ratio Decidendi

The court held that the applicants did not make out a factual case in their founding papers for an interest rate based on the Capital Asset Pricing Model or for compounding. The only rate pleaded was the prescribed legal rate, and the factual basis for a higher rate or compounding was not established. The determination of a reasonable rate of interest is a factual issue that must be pleaded and supported by evidence, not raised for the first time in heads of argument. Arrowhead did not make out a factual case for denying interest based on the applicants' conduct. The court exercised its discretion to award interest at the prescribed legal rate, without compounding, for the period from 23...

Court Disposition

Application to vary the judgment granted. Interest awarded at the prescribed legal rate, without compounding, from 23 September 2019 to the date of payment. No order as to costs.

Orders

  • The applicants are awarded interest on the determined fair value of their shares, for the period from 23 September 2019 to the date of payment, at the prescribed legal rate of interest applicable during this time period, without compounding.
  • There is no order as to costs in respect of the application for interest payment in terms of section 164(15)(c)(iii)(bb) of the Companies Act.