North West Gambling Board and Others v SANTOSAT (Pty) Ltd and Others (1943/2021) [2023] ZANWHC 21 (2 March 2023)

North West Gambling Board and Others v SANTOSAT (Pty) Ltd and Others (1943/2021) [2023] ZANWHC 21 (2 March 2023)

The court found that the Respondents failed to prove that the institution of the action proceedings was properly authorized by the majority shareholders as required by the memorandum of incorporation and relevant legislation. The Respondents did not present a valid resolution meeting the conditions for authorization. The argument that Rule 30(1) does not apply to action proceedings was rejected, as the Rule covers irregular steps regardless of the type of proceedings. The Applicants' submissions in their replying affidavit were found to be responsive to the Respondents' answering affidavit and not a fresh case. As the Respondents' institution of proceedings constituted an irregular step,...

Citation
[2023] ZANWHC 21
Parties
Applicant: North West Gambling Board; Applicant: Lavelle Winston; Applicant: Harry Mashao; Applicant: Morongoa Moss; Respondent: SANTOSAT (Pty) Ltd; Respondent: SANTOSCAN (Pty) Ltd; Respondent: Goldrush Slots North West (Pty) Ltd
Court
North West High Court, Mafikeng
Jurisdiction
South Africa
Judgment Date
2 March 2023
Case Number
1943/2021
Procedural Posture
Civil Application / Opposed Application for Setting Aside Action Proceedings Under Rule 30(1)
Outcome
Application upheld; Respondents' action proceedings set aside; costs awarded against Respondents' attorneys on attorney and client scale.
Judges
Malowa
Legal Topics
Irregular Proceedings, Company Resolution Authority, Memorandum of Incorporation, Rule 30 Application, Shareholder Majority Requirement
Civil Procedure Commercial and Corporate Irregular Proceedings Company Resolution Authority Memorandum of Incorporation Rule 30 Application Shareholder Majority Requirement

Case Brief

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Parties

North West Gambling Board

Applicant

Lavelle Winston

Applicant

Harry Mashao

Applicant

Morongoa Moss

Applicant

SANTOSAT (Pty) Ltd

Respondent

SANTOSCAN (Pty) Ltd

Respondent

Goldrush Slots North West (Pty) Ltd

Respondent

Procedural Posture

Civil Application / Opposed Application for Setting Aside Action Proceedings Under Rule 30(1)

Legal Issues

  1. 1 Whether the Applicants are entitled to relief under Rule 30(1) to set aside the Respondents' action proceedings.
  2. 2 Whether the Respondents' companies properly authorized the institution of the action proceedings against the Applicants.
  3. 3 Whether the Rule 30(1) process applies to action proceedings in this context.

Ratio Decidendi

The court found that the Respondents failed to prove that the institution of the action proceedings was properly authorized by the majority shareholders as required by the memorandum of incorporation and relevant legislation. The Respondents did not present a valid resolution meeting the conditions for authorization. The argument that Rule 30(1) does not apply to action proceedings was rejected, as the Rule covers irregular steps regardless of the type of proceedings. The Applicants' submissions in their replying affidavit were found to be responsive to the Respondents' answering affidavit and not a fresh case. As the Respondents' institution of proceedings constituted an irregular step,...

Court Disposition

Application upheld; Respondents' action proceedings set aside; costs awarded against Respondents' attorneys on attorney and client scale.

Orders

  • The action proceedings purportedly instituted on behalf of the Respondents/Plaintiffs are set aside.
  • The Respondents'/Plaintiffs' attorneys or those who instructed them are ordered to pay the costs of suit, including the costs of this application, on the attorney and client scale, including costs occasioned by the employment of two counsel.