Smyth and Others v Investec Bank Limited and Another (674/2016) [2017] ZASCA 147; [2018] 1 All SA 1 (SCA); 2018 (1) SA 494 (SCA) (26 October 2017)

Smyth and Others v Investec Bank Limited and Another (674/2016) [2017] ZASCA 147; [2018] 1 All SA 1 (SCA); 2018 (1) SA 494 (SCA) (26 October 2017)

The Supreme Court of Appeal held that the remedy under section 252 of the Companies Act 61 of 1973 is available only to members of a company whose names are entered in the register of members, as defined in section 103. Beneficial owners of shares held through nominees are not members for the purposes of section 252 and therefore lack locus standi to seek relief under this provision. The court rejected the argument that beneficial owners could join as co-applicants with their nominees, finding that the statutory remedy is confined to registered members and that the nominees, acting on instructions of the beneficial owners, are the proper parties to assert claims. The court emphasised that...

Citation
[2017] ZASCA 147
Parties
Appellant: David John Smyth and Forty Others; Respondent: Investec Bank Limited; Respondent: Randgold & Exploration Company Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
26 October 2017
Case Number
674/2016
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Navsa, Lewis, Petse, Mathopo, Schippers
Legal Topics
Oppressive Conduct, Locus Standi, Beneficial Ownership, Companies Act Section 252
Commercial and Corporate Oppressive Conduct Locus Standi Beneficial Ownership Companies Act Section 252

Case Brief

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Parties

David John Smyth and Forty Others

Appellant

Investec Bank Limited

Respondent

Randgold & Exploration Company Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether the remedy under section 252 of the Companies Act 61 of 1973 is available to beneficial owners of shares held through nominees.
  2. 2 Whether beneficial owners who cannot invoke section 252 may nonetheless join as co-applicants with their nominees in proceedings for relief under section 252.
  3. 3 Whether only registered members have locus standi to approach the court in terms of section 252.

Ratio Decidendi

The Supreme Court of Appeal held that the remedy under section 252 of the Companies Act 61 of 1973 is available only to members of a company whose names are entered in the register of members, as defined in section 103. Beneficial owners of shares held through nominees are not members for the purposes of section 252 and therefore lack locus standi to seek relief under this provision. The court rejected the argument that beneficial owners could join as co-applicants with their nominees, finding that the statutory remedy is confined to registered members and that the nominees, acting on instructions of the beneficial owners, are the proper parties to assert claims. The court emphasised that...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

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