BNS Nominees (RF) (Proprietary) Limited and Another v Zeder Investments Limited and Another [2021] ZAWCHC 263; 2025 (4) SA 134 (WCC) (3 December 2021)

BNS Nominees (RF) (Proprietary) Limited and Another v Zeder Investments Limited and Another [2021] ZAWCHC 263; 2025 (4) SA 134 (WCC) (3 December 2021)

The court held that the determination of 'fair value' under section 164 of the Companies Act is a fact-sensitive exercise requiring consideration of all relevant circumstances, including but not limited to the market price, SOTP valuation, expert opinions, and the history of the transaction. The legislature did not intend for fair value to be equated automatically with market value, nor to enrich or impoverish dissenting shareholders. Given the complexity and the lack of judicial expertise in valuation methodologies, the court found it appropriate to appoint an independent appraiser to assist in determining the fair value of the shares. The application by the second applicant was...

Citation
[2021] ZAWCHC 263
Parties
Applicant: BNS Nominees (RF) (Proprietary) Limited; Applicant: Breede Coalitions (Proprietary) Limited; Respondent: Zeder Investments Limited; Respondent: Affected Dissenting Shareholders
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
3 December 2021
Case Number
5643/2020
Procedural Posture
Review Application / Application for Appointment of Appraiser and Determination of Fair Value Under Section 164(14) of the Companies Act
Outcome
Application granted in part: an independent appraiser is to be appointed to assist the court in determining the fair value of the first applicant's shares; application by the second applicant dismissed; costs reserved.
Judges
Nel
Legal Topics
Companies Act Section 164, Appraisal Rights, Share Valuation, Minority Shareholder Protection
Commercial and Corporate Companies Act Section 164 Appraisal Rights Share Valuation Minority Shareholder Protection

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Parties

BNS Nominees (RF) (Proprietary) Limited

Applicant

Breede Coalitions (Proprietary) Limited

Applicant

Zeder Investments Limited

Respondent

Affected Dissenting Shareholders

Respondent

Procedural Posture

Review Application / Application for Appointment of Appraiser and Determination of Fair Value Under Section 164(14) of the Companies Act

Legal Issues

  1. 1 What is the correct methodology for determining the 'fair value' of dissenting shareholders' shares under section 164 of the Companies Act?
  2. 2 Should an independent appraiser be appointed to assist the court in determining fair value?
  3. 3 Does the market price or sum-of-the-parts (SOTP) valuation better reflect fair value in this context?

Ratio Decidendi

The court held that the determination of 'fair value' under section 164 of the Companies Act is a fact-sensitive exercise requiring consideration of all relevant circumstances, including but not limited to the market price, SOTP valuation, expert opinions, and the history of the transaction. The legislature did not intend for fair value to be equated automatically with market value, nor to enrich or impoverish dissenting shareholders. Given the complexity and the lack of judicial expertise in valuation methodologies, the court found it appropriate to appoint an independent appraiser to assist in determining the fair value of the shares. The application by the second applicant was...

Court Disposition

Application granted in part: an independent appraiser is to be appointed to assist the court in determining the fair value of the first applicant's shares; application by the second applicant dismissed; costs reserved.

Orders

  • An independent appraiser is appointed in terms of section 164(15)(c)(iii)(aa) of the Companies Act on specified terms.
  • The first applicant and first respondent must attempt in good faith to agree on the identity of the appraiser within ten days; failing agreement, the appraiser will be nominated by the CEO of SAICA from specified firms.