Off-Beat Holiday Club and Another v Sanbonani Holiday Spa Share Block Limited and Others (20231/2014) [2016] ZASCA 62; [2016] 2 All SA 704 (SCA); 2016 (6) SA 181 (SCA) (25 April 2016)

Off-Beat Holiday Club and Another v Sanbonani Holiday Spa Share Block Limited and Others (20231/2014) [2016] ZASCA 62; [2016] 2 All SA 704 (SCA); 2016 (6) SA 181 (SCA) (25 April 2016)

The Supreme Court of Appeal held that the claims brought by the minority shareholders under sections 252 and 266 of the Companies Act are personal rights and generally susceptible to extinctive prescription under the Prescription Act. However, the relief sought under section 252 in this case is not a mere rectification claim, as it would alter the rights and obligations of the parties and create a new contract, thus it is subject to prescription. In respect of the derivative action under section 266, the court found that the right to seek the appointment of a curator ad litem does not itself create a debt; the debt arises only when the curator is authorised to institute proceedings on...

Citation
[2016] ZASCA 62
Parties
Appellant: Off-Beat Holiday Club; Appellant: Flexi Holiday Club; Respondent: Sanbonani Holiday Spa Share Block Limited; Respondent: Sanbonani Development (Pty) Limited; Respondent: Hans Michael Harri; Respondent: Hans Michael Harri NO; Respondent: Heleen Duporetha Harri NO; Respondent: Vincent Christopher Calaca NO; Respondent: Sanbonani Hotel Management (Pty) Ltd; Respondent: Registrar of Companies
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
25 April 2016
Case Number
20231/2014
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court, Pretoria; Application for Leave to Appeal and Condonation
Outcome
Appeal upheld; condonation granted; order of the court a quo amended to include VAT refund claims.
Judges
M Maya, C Cachalia, L Leach, T Tshiqi, N Zondi
Legal Topics
Minority Shareholder Remedies, Extinctive Prescription, Derivative Action, Oppressive Conduct, Rectification of Company Records, Vat Refund Claims
Commercial and Corporate Civil Procedure Minority Shareholder Remedies Extinctive Prescription Derivative Action Oppressive Conduct Rectification of Company Records Vat Refund Claims

Case Brief

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Parties

Off-Beat Holiday Club

Appellant

Flexi Holiday Club

Appellant

Sanbonani Holiday Spa Share Block Limited

Respondent

Sanbonani Development (Pty) Limited

Respondent

Hans Michael Harri

Respondent

Hans Michael Harri NO

Respondent

Heleen Duporetha Harri NO

Respondent

Vincent Christopher Calaca NO

Respondent

Sanbonani Hotel Management (Pty) Ltd

Respondent

Registrar of Companies

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court, Pretoria; Application for Leave to Appeal and Condonation

Legal Issues

  1. 1 Whether claims brought by minority shareholders under sections 252 and 266 of the Companies Act 61 of 1973 constitute 'debts' as envisaged in section 10 of the Prescription Act 68 of 1969 and are susceptible to prescription.
  2. 2 Whether section 13(1)(e) of the Prescription Act insulates a claim brought under section 266 of the Companies Act from prescription.
  3. 3 Whether the relief sought under section 252 is a rectification claim not subject to prescription.

Ratio Decidendi

The Supreme Court of Appeal held that the claims brought by the minority shareholders under sections 252 and 266 of the Companies Act are personal rights and generally susceptible to extinctive prescription under the Prescription Act. However, the relief sought under section 252 in this case is not a mere rectification claim, as it would alter the rights and obligations of the parties and create a new contract, thus it is subject to prescription. In respect of the derivative action under section 266, the court found that the right to seek the appointment of a curator ad litem does not itself create a debt; the debt arises only when the curator is authorised to institute proceedings on...

Court Disposition

Appeal upheld; condonation granted; order of the court a quo amended to include VAT refund claims.

Orders

  • The applicants' condonation application is granted. They are ordered to pay the wasted costs including the costs of two counsel.
  • The application for leave to appeal is granted and the appeal is upheld, with costs including those consequent upon the employment of two counsel.