Skillfull 1059 (Pty) Ltd v Eastern Cape Liquor Board and Another (2851/2017) [2018] ZAECPEHC 38 (31 July 2018)

Skillfull 1059 (Pty) Ltd v Eastern Cape Liquor Board and Another (2851/2017) [2018] ZAECPEHC 38 (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 remain vested in the converted company. Section 22(11) of the Liquor Act, which provides for transfer of registration to another person, does not apply to such conversions, as there is no change in the legal entity. The Liquor Board is obliged, in accordance with the principle of legality, to amend its records and issue an amended certificate of registration reflecting the converted entity. The absence of an express provision in the...

Citation
[2018] ZAECPEHC 38
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 / First Instance Judgment
Outcome
Application granted; declaratory and mandatory orders issued in favour of the applicant.
Judges
G G Goosen
Legal Topics
Conversion of Close Corporation, Certificate of Registration Amendment, Ultra Vires, Interpretation of Statutes, Regulatory Authority Powers
Administrative Law Commercial and Corporate Conversion of Close Corporation Certificate of Registration Amendment Ultra Vires Interpretation of Statutes Regulatory Authority Powers

Case Brief

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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 / First Instance 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 requiring a transfer application?
  3. 3 Is there a conflict between the Companies Act and the Liquor Act regarding the conversion and registration process?

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 remain vested in the converted company. Section 22(11) of the Liquor Act, which provides for transfer of registration to another person, does not apply to such conversions, as there is no change in the legal entity. The Liquor Board is obliged, in accordance with the principle of legality, to amend its records and issue an amended certificate of registration reflecting the converted entity. The absence of an express provision in the...

Court Disposition

Application granted; declaratory and mandatory orders issued in favour of the applicant.

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.