Registrateur Van Aandelebeurse v Aldum en andere (320/2000) [2001] ZASCA 136; 2002 (2) SA 767 (SCA) (28 November 2001)

Registrateur Van Aandelebeurse v Aldum en andere (320/2000) [2001] ZASCA 136; 2002 (2) SA 767 (SCA) (28 November 2001)

The court found that the agreements in question were not disguised contracts of sale but genuine loan agreements with shares pledged as security. The respondent did not acquire the shares for his own account; rather, the agreements provided for the sale of shares only in the event of default, with any surplus to be paid to the borrower. The fact that some borrowers repaid and recovered their shares was inconsistent with a contract of sale. The rights and obligations created by the agreements did not support the conclusion that the parties intended a sale. Accordingly, the respondent did not contravene section 3(2) of the Stock Exchange Control Act, and there was no basis for finding a...

Citation
[2001] ZASCA 136
Parties
Appellant: Die Registrateur van Aandelebeurse; Respondent: Cornelius Stephanus Aldum h/a onder andere Onecor Groep, Cash for Africa, Bankwise, Number One en Simunye
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 November 2001
Case Number
320/2000
Procedural Posture
Civil Appeal / Appeal From the Transvaal Provincial Division After Oral Evidence and Costs Order
Outcome
The appeal is dismissed with costs.
Judges
JJF Hefer, Scott AR, Cameron AR, Mthiyane AR, Nugent AR
Legal Topics
Simulated Transactions, Share Lending Agreements, Contravention of Stock Exchange Control Act, Costs Against Public Official
Commercial and Corporate Civil Procedure Simulated Transactions Share Lending Agreements Contravention of Stock Exchange Control Act Costs Against Public Official

Case Brief

Summary, issues, holding and outcome

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Parties

Die Registrateur van Aandelebeurse

Appellant

Cornelius Stephanus Aldum h/a onder andere Onecor Groep, Cash for Africa, Bankwise, Number One en Simunye

Respondent

Procedural Posture

Civil Appeal / Appeal From the Transvaal Provincial Division After Oral Evidence and Costs Order

Legal Issues

  1. 1 Whether the written agreements under which the respondent took possession of shares as security for loans were genuine loan agreements or disguised contracts of sale.
  2. 2 Whether the respondent contravened sections 3(2) and 39 of the Stock Exchange Control Act 1 of 1985 by engaging in the business of buying and selling listed shares without being a member of a stock exchange or a bank official.
  3. 3 Whether the costs order against the appellant, a public official, was justified.

Ratio Decidendi

The court found that the agreements in question were not disguised contracts of sale but genuine loan agreements with shares pledged as security. The respondent did not acquire the shares for his own account; rather, the agreements provided for the sale of shares only in the event of default, with any surplus to be paid to the borrower. The fact that some borrowers repaid and recovered their shares was inconsistent with a contract of sale. The rights and obligations created by the agreements did not support the conclusion that the parties intended a sale. Accordingly, the respondent did not contravene section 3(2) of the Stock Exchange Control Act, and there was no basis for finding a...

Court Disposition

The appeal is dismissed with costs.

Orders

  • The appeal is dismissed with costs.