Moss and Another v Lobetal Ranch (Pty) Ltd and Others (27301/2013) [2020] ZAGPPHC 810 (23 April 2020)

Moss and Another v Lobetal Ranch (Pty) Ltd and Others (27301/2013) [2020] ZAGPPHC 810 (23 April 2020)

The court found that the issuing of 38 further shares in Lobetal on 8 January 2000 was in contravention of section 221 of the Companies Act 61 of 1973, as there was no general meeting or prior approval by shareholders. Poolman, who had authority as sole subscriber and director at the time of the original share issue in April 1999, did not have such authority after other shareholders existed. The subsequent share issue was done without notification or approval, and retrospective ratification was not permitted by the Act. The court distinguished between the initial share issue, which was validly done by the sole subscriber/director, and the later issue, which diluted the Plaintiffs'...

Citation
[2020] ZAGPPHC 810
Parties
Plaintiff: George Frederick Moss; Plaintiff: Rachel Elizabeth Moss; Defendant: Lobetal Ranch (Pty) Ltd; Defendant: Panayotis Asmaclis; Defendant: Michael Adriaan Diedericks; Defendant: Frederick Sprenzel; Defendant: Robert Godfrey Poolman; Defendant: Frans Johannes Grotius; Defendant: Adriaan De Waal Human; Defendant: Petrus Louis Van Tonder; Defendant: Christiaan Johannes Perold; Defendant: Hans Werner Klein; Defendant: Pieter Daniel Uys; Defendant: Loraine Strydom; Defendant: F Sprenzel N.O.; Defendant: Hendrik Johannes Fourie; Defendant: Pierre Du Toit; Defendant: Hermanus N Fourie; Defendant: Paul Johannes Grobler; Defendant: John Hardy; Defendant: Jonathan Nothnagel; Defendant: Margaret Erna Helen Poolman; Defendant: Anton Deon Smith; Defendant: Andries Viviers; Defendant: Peter Brenham Francis; Defendant: Latter Rain Mission
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
23 April 2020
Case Number
27301/2013
Procedural Posture
Civil Trial / Final Judgment
Outcome
Plaintiffs succeed in obtaining declaratory relief; further shares issued on 8 January 2000 are declared null and void.
Judges
Khumalo
Legal Topics
Share Issue Authority, Companies Act 1973, Invalid Share Allotment, Minority Shareholder Protection
Commercial and Corporate Share Issue Authority Companies Act 1973 Invalid Share Allotment Minority Shareholder Protection

Case Brief

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Parties

George Frederick Moss

Plaintiff

Rachel Elizabeth Moss

Plaintiff

Lobetal Ranch (Pty) Ltd

Defendant

Panayotis Asmaclis

Defendant

Michael Adriaan Diedericks

Defendant

Frederick Sprenzel

Defendant

Robert Godfrey Poolman

Defendant

Frans Johannes Grotius

Defendant

Adriaan De Waal Human

Defendant

Petrus Louis Van Tonder

Defendant

Christiaan Johannes Perold

Defendant

Hans Werner Klein

Defendant

Pieter Daniel Uys

Defendant

Loraine Strydom

Defendant

F Sprenzel N.O.

Defendant

Hendrik Johannes Fourie

Defendant

Pierre Du Toit

Defendant

Hermanus N Fourie

Defendant

Paul Johannes Grobler

Defendant

John Hardy

Defendant

Jonathan Nothnagel

Defendant

Margaret Erna Helen Poolman

Defendant

Anton Deon Smith

Defendant

Andries Viviers

Defendant

Peter Brenham Francis

Defendant

Latter Rain Mission

Defendant

Procedural Posture

Civil Trial / Final Judgment

Legal Issues

  1. 1 Whether the issuing of 38 further shares in Lobetal on 8 January 2000 contravened section 221 of the Companies Act 61 of 1973.
  2. 2 Whether the further shares issued should be declared null and void for lack of shareholder approval.
  3. 3 Whether the original 91 shares issued in April 1999 were validly issued under the authority of the sole subscriber/director.

Ratio Decidendi

The court found that the issuing of 38 further shares in Lobetal on 8 January 2000 was in contravention of section 221 of the Companies Act 61 of 1973, as there was no general meeting or prior approval by shareholders. Poolman, who had authority as sole subscriber and director at the time of the original share issue in April 1999, did not have such authority after other shareholders existed. The subsequent share issue was done without notification or approval, and retrospective ratification was not permitted by the Act. The court distinguished between the initial share issue, which was validly done by the sole subscriber/director, and the later issue, which diluted the Plaintiffs'...

Court Disposition

Plaintiffs succeed in obtaining declaratory relief; further shares issued on 8 January 2000 are declared null and void.

Orders

  • The issuing of further shares in Lobetal on 8 January 2000 is declared null and void and of no force or effect.
  • It is declared that there are 91 issued shares in the 1st Defendant.