Smyth and Others v Investec Bank Ltd and Another, In re: Standard Bank Nominees (TVL) Pty Ltd and Others (19269/2011) [2015] ZAGPPHC 1144; 2016 (4) SA 363 (GP) (17 September 2015)

Smyth and Others v Investec Bank Ltd and Another, In re: Standard Bank Nominees (TVL) Pty Ltd and Others (19269/2011) [2015] ZAGPPHC 1144; 2016 (4) SA 363 (GP) (17 September 2015)

The court held that only registered members whose names appear in the register of members of a company have locus standi to bring proceedings under section 252 of the Companies Act. Beneficial owners whose shares are registered in the names of nominees do not qualify as 'members' for the purposes of section 252 and therefore lack standing to seek relief for unfairly prejudicial conduct. The court found that section 103 of the Act provides an exhaustive definition of 'member', and that extending standing to beneficial owners would constitute judicial legislation, not interpretation. The court relied on South African and English authorities, which consistently restrict standing to...

Citation
[2015] ZAGPPHC 1144
Parties
Applicant: D.J. Smyth; Respondent: Investec Bank Ltd; Respondent: Randgold & Exploration Co Ltd; Applicant: Standard Bank Nominees (TVL) Pty Ltd; Applicant: Shap-Aron Nominees (Pty) Ltd; Applicant: BNS Nominees (Pty) Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
17 September 2015
Case Number
19269/2011
Procedural Posture
Civil Application / Determination of Locus Standi and Intervention Applications Prior to Main Application
Outcome
Applications by the seven main applicants and 27 beneficial owners dismissed for lack of locus standi; intervention applications by nominees and newly registered members granted; costs awarded as specified.
Judges
C.P. Rabie
Legal Topics
Locus Standi, Minority Shareholder Remedy, Section 252 Companies Act, Nominee Shareholding, Intervention Application
Commercial and Corporate Civil Procedure Locus Standi Minority Shareholder Remedy Section 252 Companies Act Nominee Shareholding Intervention Application

Case Brief

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Parties

D.J. Smyth

Applicant

Investec Bank Ltd

Respondent

Randgold & Exploration Co Ltd

Respondent

Standard Bank Nominees (TVL) Pty Ltd

Applicant

Shap-Aron Nominees (Pty) Ltd

Applicant

BNS Nominees (Pty) Ltd

Applicant

Procedural Posture

Civil Application / Determination of Locus Standi and Intervention Applications Prior to Main Application

Legal Issues

  1. 1 Whether beneficial owners of shares registered in the name of nominees have locus standi to bring proceedings under section 252 of the Companies Act.
  2. 2 Whether only registered members may apply for relief under section 252.
  3. 3 Whether nominees and newly registered members have standing to intervene in the main application.

Ratio Decidendi

The court held that only registered members whose names appear in the register of members of a company have locus standi to bring proceedings under section 252 of the Companies Act. Beneficial owners whose shares are registered in the names of nominees do not qualify as 'members' for the purposes of section 252 and therefore lack standing to seek relief for unfairly prejudicial conduct. The court found that section 103 of the Act provides an exhaustive definition of 'member', and that extending standing to beneficial owners would constitute judicial legislation, not interpretation. The court relied on South African and English authorities, which consistently restrict standing to...

Court Disposition

Applications by the seven main applicants and 27 beneficial owners dismissed for lack of locus standi; intervention applications by nominees and newly registered members granted; costs awarded as specified.

Orders

  • The application of the seven main applicants is refused and they are removed as applicants from the main application.
  • The seven main applicants are ordered jointly and severally to pay the costs of the first respondent relating to the main application, including the locus standi objection.