Rametse v Mathada and Others (2023-056232) [2023] ZAGPJHC 712 (19 June 2023)

Rametse v Mathada and Others (2023-056232) [2023] ZAGPJHC 712 (19 June 2023)

The removal of the applicant as director was not effected in accordance with the procedural requirements of section 71 of the Companies Act. No shareholders' meeting was held, no notice of the proposed resolution was given to the applicant, and he was not afforded an opportunity to make representations. The fact that the majority shareholder supported the removal does not excuse non-compliance with statutory procedure. The applicant is entitled to urgent relief to restore his directorship and correct the CIPC records, as third parties may rely on those records and the status quo must be restored.

Citation
[2023] ZAGPJHC 712
Parties
Applicant: Tshepo Rametse; Respondent: Avhapfani Mathada; Respondent: Mart Attorneys Inc; Respondent: Companies and Intellectual Property Commission (CIPC)
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
19 June 2023
Case Number
2023-056232
Procedural Posture
Urgent Application / Final Order on Urgent Application
Outcome
Application granted; removal of applicant as director set aside and applicant reinstated.
Judges
Moorcroft
Legal Topics
Removal of Director, Companies Act Section 71, Shareholder Rights, Urgent Interdict
Commercial and Corporate Removal of Director Companies Act Section 71 Shareholder Rights Urgent Interdict

Case Brief

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Parties

Tshepo Rametse

Applicant

Avhapfani Mathada

Respondent

Mart Attorneys Inc

Respondent

Companies and Intellectual Property Commission (CIPC)

Respondent

Procedural Posture

Urgent Application / Final Order on Urgent Application

Legal Issues

  1. 1 Whether the removal of the applicant as director of the second respondent was lawful under section 71 of the Companies Act.
  2. 2 Whether the applicant was afforded the procedural rights required by section 71 prior to removal.
  3. 3 Whether the applicant is entitled to urgent reinstatement as director.

Ratio Decidendi

The removal of the applicant as director was not effected in accordance with the procedural requirements of section 71 of the Companies Act. No shareholders' meeting was held, no notice of the proposed resolution was given to the applicant, and he was not afforded an opportunity to make representations. The fact that the majority shareholder supported the removal does not excuse non-compliance with statutory procedure. The applicant is entitled to urgent relief to restore his directorship and correct the CIPC records, as third parties may rely on those records and the status quo must be restored.

Court Disposition

Application granted; removal of applicant as director set aside and applicant reinstated.

Orders

  • The removal of the applicant as a director of the second respondent is set aside.
  • The first and second respondents are directed forthwith to reinstate the applicant as a director of the second respondent, Mart Attorneys Inc, in the records of the third respondent.