Skillfull 1059 (Pty) Limited v Eastern Cape Liquor Board and Another (2851/2017) [2018] ZAECPEHC 35 (31 July 2018)

Skillfull 1059 (Pty) Limited v Eastern Cape Liquor Board and Another (2851/2017) [2018] ZAECPEHC 35 (31 July 2018)

The court held that the conversion of a close corporation to a company under Schedule 2 of the Companies Act does not create a new legal entity; the same juristic person continues to exist. Therefore, the rights conferred by the liquor registration certificate vest in the converted company without the need for a transfer under section 22(11) of the Liquor Act. The Liquor Act is silent on the procedure for conversion, and there is no conflict between the Acts. The Board is not required to exercise its adjudicative powers but is obliged to amend its records and issue an amended certificate to reflect the conversion, in accordance with the principle of legality. Requiring a transfer...

Citation
[2018] ZAECPEHC 35
Parties
Applicant: Skillfull 1059 (Pty) Limited; Respondent: Eastern Cape Liquor Board; Respondent: The MEC, Economic Development, Tourism and Environmental Affairs
Court
Eastern Cape High Court, Port Elizabeth
Jurisdiction
South Africa
Judgment Date
31 July 2018
Case Number
2851/2017
Procedural Posture
Review Application / Final Judgment
Outcome
Application granted with costs (except for reserved costs of 29 March 2018, for which no order is made).
Judges
G G Goosen
Legal Topics
Conversion of Close Corporation, Certificate of Registration Amendment, Ultra Vires Powers, Statutory Interpretation, Principle of Legality
Administrative Law Commercial and Corporate Conversion of Close Corporation Certificate of Registration Amendment Ultra Vires Powers Statutory Interpretation Principle of Legality

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Parties

Skillfull 1059 (Pty) Limited

Applicant

Eastern Cape Liquor Board

Respondent

The MEC, Economic Development, Tourism and Environmental Affairs

Respondent

Procedural Posture

Review Application / Final Judgment

Legal Issues

  1. 1 Does section 22(11) of the Eastern Cape Liquor Act apply to the conversion of a close corporation to a company under Schedule 2 of the Companies Act?
  2. 2 Is the Eastern Cape Liquor Board empowered to amend its records and issue an amended certificate of registration to a converted company without a transfer application?
  3. 3 Is there a conflict between the Companies Act and the Liquor Act regarding conversion and registration amendment?

Ratio Decidendi

The court held that the conversion of a close corporation to a company under Schedule 2 of the Companies Act does not create a new legal entity; the same juristic person continues to exist. Therefore, the rights conferred by the liquor registration certificate vest in the converted company without the need for a transfer under section 22(11) of the Liquor Act. The Liquor Act is silent on the procedure for conversion, and there is no conflict between the Acts. The Board is not required to exercise its adjudicative powers but is obliged to amend its records and issue an amended certificate to reflect the conversion, in accordance with the principle of legality. Requiring a transfer...

Court Disposition

Application granted with costs (except for reserved costs of 29 March 2018, for which no order is made).

Orders

  • It is declared that section 22(11) of the Eastern Cape Liquor Act does not apply to the amendment of the Certificate of Registration issued to a close corporation converted to a company under Schedule 2 of the Companies Act.
  • The first respondent is ordered to place a copy of the applicant’s Certificate of Registration issued by the Companies and Intellectual Properties Commission on file and to amend its records within 21 days.