New Heights Developers (Pty) Ltd v Bogatsu (2013/24397) [2017] ZAGPJHC 353 (23 November 2017)

New Heights Developers (Pty) Ltd v Bogatsu (2013/24397) [2017] ZAGPJHC 353 (23 November 2017)

The court held that section 165 of the Companies Act is not limited to compelling a company to commence or continue legal proceedings, but also includes taking related steps to protect the company's legal interests. The phrase 'or take related steps' must be given meaning and interpreted within the context of the statute's purpose. The respondent, as executrix of Maepa's estate and a director, had sufficient standing to make the demand under section 165. The demand was not vexatious, as it was made to protect the company's interests in PAD and was not for a collateral or improper purpose. The application to set aside the demand and for declaratory relief was dismissed with costs. The...

Citation
[2017] ZAGPJHC 353
Parties
Applicant: New Heights Developers (Pty) Ltd; Respondent: Bogatsu, Manana Shereen
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
23 November 2017
Case Number
2013/24397
Procedural Posture
Declaratory Application / Main Application and Application for Leave to Appeal
Outcome
Application dismissed with costs. Application for leave to appeal dismissed with costs, except each party to bear its own costs in respect of the supplementary affidavit and response thereto.
Judges
Spilg
Legal Topics
Derivative Actions, Companies Act 71 of 2008, Locus Standi, Shareholder Rights, Statutory Interpretation
Commercial and Corporate Civil Procedure Derivative Actions Companies Act 71 of 2008 Locus Standi Shareholder Rights Statutory Interpretation

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 8 Party arguments 2
Sign in to unlock

Parties

New Heights Developers (Pty) Ltd

Applicant

Bogatsu, Manana Shereen

Respondent

Procedural Posture

Declaratory Application / Main Application and Application for Leave to Appeal

Legal Issues

  1. 1 Whether section 165 of the Companies Act 71 of 2008 allows a demand to compel a company to adopt a particular stance in litigation or only to commence or continue proceedings to protect its legal interests.
  2. 2 Whether the respondent had locus standi to make a demand under section 165 as a director or shareholder of the applicant.
  3. 3 Whether the demand made by the respondent was vexatious or made with an ulterior motive.

Ratio Decidendi

The court held that section 165 of the Companies Act is not limited to compelling a company to commence or continue legal proceedings, but also includes taking related steps to protect the company's legal interests. The phrase 'or take related steps' must be given meaning and interpreted within the context of the statute's purpose. The respondent, as executrix of Maepa's estate and a director, had sufficient standing to make the demand under section 165. The demand was not vexatious, as it was made to protect the company's interests in PAD and was not for a collateral or improper purpose. The application to set aside the demand and for declaratory relief was dismissed with costs. The...

Court Disposition

Application dismissed with costs. Application for leave to appeal dismissed with costs, except each party to bear its own costs in respect of the supplementary affidavit and response thereto.

Orders

  • The application is dismissed with costs.
  • The application for leave to appeal is dismissed with costs, save that each party will bear its own costs in respect of the supplementary affidavit and response thereto.