Remgro Limited and Another v Unilever South Africa Holdings (Pty) Limited (8835/2015) [2015] ZAKZPHC 54 (23 November 2015)

Remgro Limited and Another v Unilever South Africa Holdings (Pty) Limited (8835/2015) [2015] ZAKZPHC 54 (23 November 2015)

The court found that the applicants had not established a basis for the relief sought. The shareholders agreement and memorandum of incorporation provide a process for amending the Corporate Services Agreement, including a deadlock-breaking mechanism that allows the majority shareholders to override the minority veto after two unsuccessful meetings. The directors' duty is to facilitate discussion, not to block proposals. The meeting notice for 24 November 2015 complied with the requirement for board discussion and did not propose a resolution for consideration or voting. The application was fatally defective due to non-joinder of the Unilever shareholders, whose rights would be directly...

Citation
[2015] ZAKZPHC 54
Parties
Applicant: Remgro Limited; Applicant: Robertsons Holdings (Pty) Limited; Respondent: Unilever South Africa Holdings (Pty) Limited
Court
Kwazulu-Natal High Court, Pietermaritzburg
Jurisdiction
South Africa
Judgment Date
23 November 2015
Case Number
8835/2015
Procedural Posture
Urgent Application / Application for Interim Interdict Prior to Board/shareholder Meeting
Outcome
Application dismissed with costs, including costs of two counsel, jointly and severally against the applicants.
Judges
Olsen
Legal Topics
Shareholders Agreement, Deadlock Resolution, Fiduciary Duties, Section 165 Companies Act, Minority Protection, Non Joinder
Commercial and Corporate Civil Procedure Shareholders Agreement Deadlock Resolution Fiduciary Duties Section 165 Companies Act Minority Protection Non Joinder

Case Brief

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Parties

Remgro Limited

Applicant

Robertsons Holdings (Pty) Limited

Applicant

Unilever South Africa Holdings (Pty) Limited

Respondent

Procedural Posture

Urgent Application / Application for Interim Interdict Prior to Board/shareholder Meeting

Legal Issues

  1. 1 Whether the applicants are entitled to an interdict preventing the respondent from holding meetings to discuss or consider the proposed amendment to the Corporate Services Agreement.
  2. 2 Whether the directors of the respondent are obliged to prevent discussion of the proposal to amend the Corporate Services Agreement fees.
  3. 3 Whether the application is fatally defective due to non-joinder of the Unilever shareholders.

Ratio Decidendi

The court found that the applicants had not established a basis for the relief sought. The shareholders agreement and memorandum of incorporation provide a process for amending the Corporate Services Agreement, including a deadlock-breaking mechanism that allows the majority shareholders to override the minority veto after two unsuccessful meetings. The directors' duty is to facilitate discussion, not to block proposals. The meeting notice for 24 November 2015 complied with the requirement for board discussion and did not propose a resolution for consideration or voting. The application was fatally defective due to non-joinder of the Unilever shareholders, whose rights would be directly...

Court Disposition

Application dismissed with costs, including costs of two counsel, jointly and severally against the applicants.

Orders

  • The application is dismissed.
  • The costs of the application, including the costs of two counsel, shall be paid by the applicants, their liability being joint and several.