Kewco Proprietary Limited and Others v Second Chapter Investments Proprietary Limited and Others (12058/2018) [2018] ZAGPJHC 530 (7 September 2018)

Kewco Proprietary Limited and Others v Second Chapter Investments Proprietary Limited and Others (12058/2018) [2018] ZAGPJHC 530 (7 September 2018)

The applicants failed to establish a prima facie right to the interim relief sought. Their reliance on section 163 of the Companies Act 2008 is dubious and not supported by the facts. The competitive sale process is expressly provided for in clause 16 of the MOI, which the applicants accepted. There is no evidence of mala fide conduct or oppression by the respondents; rather, the process is in the interests of all shareholders. The applicants have alternative remedies, including participation in the bidding process and arbitration under clause 18 of the MOI. The balance of convenience favours the respondents, as granting the interdict would prejudice the majority shareholders and impede...

Citation
[2018] ZAGPJHC 530
Parties
Applicant: Kewco Proprietary Limited; Applicant: Gregory David Senior; Applicant: Lewis Golden N.O.; Applicant: Andrea Senior N.O.; Respondent: Second Chapter Investments Proprietary Limited; Respondent: Lodestone Brands Proprietary Limited; Respondent: Mayfair Holdings Proprietary Limited; Respondent: Mayfair Speculators Proprietary Limited; Respondent: The Standard Bank of South Africa Limited; Respondent: Johan van Zyl; Respondent: Mark Russell; Respondent: Kugin Mutu; Respondent: Kate Crawford
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
7 September 2018
Case Number
12058/2018
Procedural Posture
Urgent Application / Interim Interdict Application (part A) Pending Final Relief (part B)
Outcome
Application for interim relief dismissed with costs, including costs of two counsel.
Judges
D S S Moshidi
Legal Topics
Minority Shareholder Protection, Oppressive Conduct, Memorandum of Incorporation, Interim Interdict, Section 163 Companies Act
Commercial and Corporate Civil Procedure Minority Shareholder Protection Oppressive Conduct Memorandum of Incorporation Interim Interdict Section 163 Companies Act

Case Brief

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Parties

Kewco Proprietary Limited

Applicant

Gregory David Senior

Applicant

Lewis Golden N.O.

Applicant

Andrea Senior N.O.

Applicant

Second Chapter Investments Proprietary Limited

Respondent

Lodestone Brands Proprietary Limited

Respondent

Mayfair Holdings Proprietary Limited

Respondent

Mayfair Speculators Proprietary Limited

Respondent

The Standard Bank of South Africa Limited

Respondent

Johan van Zyl

Respondent

Mark Russell

Respondent

Kugin Mutu

Respondent

Kate Crawford

Respondent

Procedural Posture

Urgent Application / Interim Interdict Application (part A) Pending Final Relief (part B)

Legal Issues

  1. 1 Whether the applicants, as minority shareholders, are entitled to interim relief interdicting the competitive sale process under clause 16 of the MOI.
  2. 2 Whether the conduct of the majority shareholders and directors is oppressive, unfairly prejudicial, or disregards the interests of the applicants as contemplated by section 163(1)(a) of the Companies Act 2008.
  3. 3 Whether the requirements for an interim interdict have been satisfied.

Ratio Decidendi

The applicants failed to establish a prima facie right to the interim relief sought. Their reliance on section 163 of the Companies Act 2008 is dubious and not supported by the facts. The competitive sale process is expressly provided for in clause 16 of the MOI, which the applicants accepted. There is no evidence of mala fide conduct or oppression by the respondents; rather, the process is in the interests of all shareholders. The applicants have alternative remedies, including participation in the bidding process and arbitration under clause 18 of the MOI. The balance of convenience favours the respondents, as granting the interdict would prejudice the majority shareholders and impede...

Court Disposition

Application for interim relief dismissed with costs, including costs of two counsel.

Orders

  • The application for the relief sought in Part A of the notice of motion is dismissed with costs.
  • Costs include those occasioned by the employment of two counsel.