Fundtrust (Pty) Ltd (in liquidation) v Van Deventer (365/95) [1996] ZASCA 125; [1997] 1 All SA 644 (A) (8 November 1996)

Fundtrust (Pty) Ltd (in liquidation) v Van Deventer (365/95) [1996] ZASCA 125; [1997] 1 All SA 644 (A) (8 November 1996)

The Supreme Court of Appeal held that section 53(b) of the Companies Act 61 of 1973, which allows a company's memorandum of association to provide for joint and several liability of directors for debts and liabilities 'contracted' during their periods of office, does not extend to statutory liabilities such as those arising from voidable or undue preferences. The court found that the word 'contracted' in the section refers to consensually incurred, i.e., contractual, debts and liabilities, and not to statutory obligations imposed by law. The legislative history, context, and purpose of the provision, as well as the principle of strict interpretation of onerous statutory provisions,...

Citation
[1996] ZASCA 125
Parties
Appellant: Fundstrust (Pty) Ltd (in liquidation); Respondent: Simon Frederick Van Deventer
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
8 November 1996
Case Number
365/95
Procedural Posture
Civil Appeal / Appeal From the Cape of Good Hope Provincial Division, Exception to Particulars of Claim
Outcome
Appeal dismissed with costs, including the costs of two counsel.
Judges
Hefer, Eksteen, Nienaber, Harms, Schutz
Legal Topics
Directors Liability, Companies Act 1973, Memorandum of Association, Statutory Interpretation
Commercial and Corporate Directors Liability Companies Act 1973 Memorandum of Association Statutory Interpretation

Case Brief

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Parties

Fundstrust (Pty) Ltd (in liquidation)

Appellant

Simon Frederick Van Deventer

Respondent

Procedural Posture

Civil Appeal / Appeal From the Cape of Good Hope Provincial Division, Exception to Particulars of Claim

Legal Issues

  1. 1 Whether directors' liability under section 53(b) of the Companies Act 61 of 1973 extends to statutory liabilities such as voidable or undue preferences, or is limited to contractual debts and liabilities.
  2. 2 Whether the particulars of claim disclosed a cause of action against directors for statutory liabilities incurred by the company.

Ratio Decidendi

The Supreme Court of Appeal held that section 53(b) of the Companies Act 61 of 1973, which allows a company's memorandum of association to provide for joint and several liability of directors for debts and liabilities 'contracted' during their periods of office, does not extend to statutory liabilities such as those arising from voidable or undue preferences. The court found that the word 'contracted' in the section refers to consensually incurred, i.e., contractual, debts and liabilities, and not to statutory obligations imposed by law. The legislative history, context, and purpose of the provision, as well as the principle of strict interpretation of onerous statutory provisions,...

Court Disposition

Appeal dismissed with costs, including the costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.