Pakade N.O. and Others v Lukhanji Leisure (Pty) Ltd and Others (3390/2016) [2017] ZAECGHC 22 (7 March 2017)

Pakade N.O. and Others v Lukhanji Leisure (Pty) Ltd and Others (3390/2016) [2017] ZAECGHC 22 (7 March 2017)

The court found that the Trust, as minority shareholder, was not unfairly prejudiced or oppressed by the conduct of the majority shareholders or directors. The unanimous resolution by all shareholders, including the Trust, was that the first respondent would not participate in casino operations but would act as landlord to any entity granted a casino licence. The formation of Queens and related agreements were subject to suspensive conditions that were not fulfilled, resulting in their lapse. Subsequent commercial strategies, including the lease agreement with the second respondent, were necessitated by failed attempts to submit a compliant bid and were not designed to exclude the Trust...

Citation
[2017] ZAECGHC 22
Parties
Applicant: Johannes Monwabisi Mkululi Pakade N.O.; Applicant: Nontsikelelo Blossom Pakade N.O.; Applicant: Tabisa Moleshe N.O.; Respondent: Lukhanji Leisure (Pty) Ltd; Respondent: Zitolor (Pty) Ltd; Respondent: Eastern Cape Gambling and Betting Board
Court
Eastern Cape High Court, Grahamstown
Jurisdiction
South Africa
Judgment Date
7 March 2017
Case Number
3390/2016
Procedural Posture
Review Application / Final Judgment on Merits
Outcome
Application dismissed with costs.
Judges
NW Gqamana
Legal Topics
Oppressive Conduct, Minority Shareholder Rights, Companies Act Section 163, Board Resolutions, Lease Agreement, Locus Standi
Commercial and Corporate Civil Procedure Oppressive Conduct Minority Shareholder Rights Companies Act Section 163 Board Resolutions Lease Agreement Locus Standi

Case Brief

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Parties

Johannes Monwabisi Mkululi Pakade N.O.

Applicant

Nontsikelelo Blossom Pakade N.O.

Applicant

Tabisa Moleshe N.O.

Applicant

Lukhanji Leisure (Pty) Ltd

Respondent

Zitolor (Pty) Ltd

Respondent

Eastern Cape Gambling and Betting Board

Respondent

Procedural Posture

Review Application / Final Judgment on Merits

Legal Issues

  1. 1 Whether the lease agreement entered into between the first and second respondents was null and void.
  2. 2 Whether the Board resolution of the first respondent passed on 14 June 2016 should be set aside.
  3. 3 Whether the conduct of the majority shareholders or directors was oppressive, unfairly prejudicial, or unfairly disregarded the interests of the minority shareholder (the Trust) under section 163(1) of the Companies Act.

Ratio Decidendi

The court found that the Trust, as minority shareholder, was not unfairly prejudiced or oppressed by the conduct of the majority shareholders or directors. The unanimous resolution by all shareholders, including the Trust, was that the first respondent would not participate in casino operations but would act as landlord to any entity granted a casino licence. The formation of Queens and related agreements were subject to suspensive conditions that were not fulfilled, resulting in their lapse. Subsequent commercial strategies, including the lease agreement with the second respondent, were necessitated by failed attempts to submit a compliant bid and were not designed to exclude the Trust...

Court Disposition

Application dismissed with costs.

Orders

  • The application is dismissed with costs.