SA Mohair Brokers Ltd v Louw and Others (602/10) [2011] ZASCA 87 (27 May 2011)

SA Mohair Brokers Ltd v Louw and Others (602/10) [2011] ZASCA 87 (27 May 2011)

The Supreme Court of Appeal held that the sale of shares without prior approval of the directors, as required by the company's articles, is not null and void. Such a sale is binding between the seller and purchaser, but the company is not obliged to register the purchaser as a shareholder. The articles only restrict the purchaser's rights to vote and receive dividends until registration. Proxies granted by shareholders who remain registered holders are valid and must be accepted by the company. The rejection of proxies at the meeting was unlawful, and the resolutions passed at the meeting were correctly set aside by the court below. The equitable jurisdiction under section 252 of the...

Citation
[2011] ZASCA 87
Parties
Appellant: SA Mohair Brokers Ltd; Respondent: Douglas Christopher Louw; Respondent: Andre Hermann Dankwerts; Respondent: Arthur Oliver Rudman; Respondent: Geoffrey George van Coller; Respondent: Johannes Theunis Viljoen; Respondent: BKB Limited; Respondent: Ronald John Smith
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
27 May 2011
Case Number
602/10
Procedural Posture
Civil Appeal / Appeal From Eastern Cape High Court (port Elizabeth)
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Harms, Brand, Heher, Meer, Plasket
Legal Topics
Company Articles, Transfer of Shares, Proxy Voting, Shareholder Rights
Commercial and Corporate Company Articles Transfer of Shares Proxy Voting Shareholder Rights

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 1 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

SA Mohair Brokers Ltd

Appellant

Douglas Christopher Louw

Respondent

Andre Hermann Dankwerts

Respondent

Arthur Oliver Rudman

Respondent

Geoffrey George van Coller

Respondent

Johannes Theunis Viljoen

Respondent

BKB Limited

Respondent

Ronald John Smith

Respondent

Procedural Posture

Civil Appeal / Appeal From Eastern Cape High Court (port Elizabeth)

Legal Issues

  1. 1 Whether the sale of shares without prior approval of directors is null and void under the company's articles of association.
  2. 2 Whether proxies granted pursuant to such sales are valid and may be exercised at shareholder meetings.
  3. 3 Whether the rejection of proxies at the meeting was lawful.

Ratio Decidendi

The Supreme Court of Appeal held that the sale of shares without prior approval of the directors, as required by the company's articles, is not null and void. Such a sale is binding between the seller and purchaser, but the company is not obliged to register the purchaser as a shareholder. The articles only restrict the purchaser's rights to vote and receive dividends until registration. Proxies granted by shareholders who remain registered holders are valid and must be accepted by the company. The rejection of proxies at the meeting was unlawful, and the resolutions passed at the meeting were correctly set aside by the court below. The equitable jurisdiction under section 252 of the...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.