Standard Bank Nominees (RF) (Proprietary) Limited and Others v Hospitality Property Fund Limited (18/17451) [2019] ZAGPJHC 263; [2019] 4 All SA 561 (GJ); 2020 (5) SA 224 (GJ) (12 June 2019)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 18/17451

In the matter between:

STANDARD BANK NOMINEES (RF)

(PROPRIETARY) LIMITED First Applicant

THE STANDARD BANK OF SOUTH AFRICA LIMITED Second Applicant

NEDBANK COLLECTIVE INVESTMENTS (RF)

(PROPRIETARY) LIMITED Third Applicant

NEDGROUP INVESTMENT ADVISORS

(PROPRIETARY) LIMITED Fourth Applicant

And

HOSPITALITY PROPERTY FUND LIMITED Respondent

Summary

Companies Act, 2008 - section 164 - procedure for exercising right of appraisal by dissenting shareholder - notice and demand not given by registered shareholder but by third party - s164(14) application to court also given by third party - s164(14) application later withdrawn - consequences of these irregularities in context of statutory scheme - interpretation of statutory scheme under s164 - a demand for fair value under ss(5) to (8) only a preliminary, but necessary, step in the process of exercising the right to appraisal - dissenting shareholder that does not accept offer of fair value must take further step to pursue its right of appraisal - must institute an application to court under ss(14) for determination of fair value within 30 business days - effect of failure to do so is that shareholder loses right to exit its shareholding and to demand fair value - ss(10) reinstates dissenting shareholder’s full rights in respect of its shares.

J U D G M E N T

KEIGHTLEY, J:

INTRODUCTION

1. This application concerns section 164 of the Companies Act, 2008 (the Act). The section applies in certain circumstances where, among other things, a company intends to propose to its shareholders that they enter into a scheme of arrangement affecting the securities held by the shareholders.[1] Section 164 gives any shareholder who dissents to the proposed scheme of arrangement a right of appraisal. Essentially, this gives a shareholder who does not support the proposed scheme the option of exiting the company in exchange for the payment to it of fair value for its shares.

2. The section sets out a detailed procedure in terms of which the right of appraisal is to be exercised. It involves various notices and demands as between the dissenting shareholder in question and the company. If a shareholder gives the requisite notice and demand to the company this has legal implications on the ambit of its rights as a shareholder: in particular, the shareholder’s rights are restricted to the right to obtain fair value for its shares. Commentators have noted that the complexity and technicalities of the appraisal mechanism established under the section have given rise to problems and challenges. The equivalent procedure in Canadian law has been described as a “procedural morass”.[2] While I would not go so far as to say that the issues that arise in the present application necessarily support the latter description, they certainly highlight some of the challenges presented to shareholders and companies when s164 is implemented.

3. At the heart of the first issue for consideration in the present application is s164(14). This is the section that permits a dissenting shareholder to apply to court for a determination of fair value in respect of its shares. As a prerequisite, a shareholder wishing to institute an application to court under ss(14) must have given the company the necessary notice and demand.[3] What occurred in the present case is that a s164(14) application was made (the appraisal application), but was later abandoned because of common cause underlying fatal irregularities that tainted it. In other words, a determination of fair value was never agreed between the parties, nor did the court make a determination of fair value.

4. In light of this development, the parties cannot agree on what the legal position is of the shareholder under s164 vis-a-vis its rights in its shares. If a section 164(14) application is still-born, is the effect under s164 that all of the shareholder’s

rights in respect of its shares are reinstated, so that it should be treated retrospectively as having been a shareholder all along?

If so, is it entitled to claim its share of the dividend distributions that have been paid to other shareholders in the interim? Alternatively, is the shareholder held to what became a stillborn election to exit the company and is it entitled only to be paid fair value for its shares?

5. A second focus of inquiry in the present case is the legality of the steps taken by, in particular, the fourth applicant, in an attempt to implement the shareholder’s appraisal right. These steps formed part of the procedure laid down in s164, prior to the institution of the appraisal application. In short, the Act provides that it is the shareholder who must give due notice to the company of its intention to exercise the right of appraisal, and that the shareholder must make the requisite demand to the company for payment of fair value for its shares. In this case, on the face of it at least, it was the fourth applicant, who is not the shareholder, who did so. Much of the respondent’s opposition to the application is based on the defence that the fourth applicant was duly authorised to act on behalf of the shareholder, and that these steps were thus lawful and binding on the shareholder.

6. Part of the complexity of this case stems from the lack of clarity inherent in the provisions of s164. However, a large additional measure of complexity stems from the factual context in which the dispute arose and, in particular, the complicated relationship between the various applicants involved. It is important that this relationship be understood before considering the law and legal issues that arise.

BACKGROUND

7. The first applicant is Standard Bank Nominees (RF) (Proprietary) Limited (Nominees). It is the registered shareholder of the shares in question. The parties are agreed that in terms of the Act, and particularly for purposes of s164, all references to “shareholder” mean Nominees and not any of the other applicants. In other words, Nominees is the shareholder that is entitled to exercise the right of appraisal by following the procedure laid down in s164.

8. Nominees holds the shares as nominee for the second applicant, The Standard Bank of South Africa Limited, N.O. As between Nominees and the second applicant, the latter is the beneficial owner of the shares, which it holds in trust for an investment fund, the Nedbank Investments Private Wealth Property Equity Fund (the Fund). For this reason, I will refer to the second applicant as the Trustee.

9. The Fund is a portfolio in a collective investment scheme, the Nedgroup Collective Investment Scheme (the Scheme), constituted under the Collective Investment Schemes Control Act, 45 of 2002. The Scheme was established under a deed (the Deed) between the Trustee and the third applicant, Nedgroup Collective Investments (RF) (Proprietary) Limited (the Manager). In terms of the Deed, the Manager was empowered, among other things, to create portfolios, one of which, as I have indicated, was the Fund. Finally, the Manager was also empowered to appoint persons to exercise powers and functions on its behalf. It appointed the fourth applicant, Nedgroup Investment Advisors (Proprietary) Limited, (Advisors) as a discretionary financial service provider to manage, among others, the Fund.

10. Although the Trustee is the beneficial owner of the shares from Nominees’ perspective, from the perspective of the Scheme, the Trustee is only a nominal holder of the shares, held in trust for the Fund. The Fund itself does not have the legal personality required to be the holder of shares in its own stead.

11. The respondent, Hospitality Property Fund Limited (HPF) is a real estate investment trust company. Its securities are traded publicly and listed on the JSE. Until 1 July 2015, Nominees was the registered shareholder of B Linked Units (the Units) in HPF. It is not necessary for me to go into any further details about the nature of the Units, save to say that they were indivisibly linked shares and debentures. On 1 July 2015, HPF issued a circular to the holders of its Units giving notice of a meeting at which a special resolution would be proposed. If adopted, the resolution would result in the implementation of a scheme of arrangement in terms of which the Units’ linked capital structure would be altered to a simple all share structure.

This involved a substitution of all Units for No Par Value B Shares. All Unit holders would become holders of No Par Value B Shares.

12. The proposed scheme of arrangement was such that it triggered the rights of appraisal under s164 of all affected shareholders, including Nominees.

13. HPF duly alerted shareholders to this by way of a notice under s164(2)(b). It is common cause that Advisors then engaged with HPF in giving the required notice and demand to signal an intention to exercise the appraisal right. The legal effect of this engagement will be considered during the course of this judgment.

14. The first formal document that was given to HPF was a proxy form. This is an important document for purposes of permitting a shareholder to vote at the meeting to be held for purposes of considering the special resolution proposing the scheme of arrangement. Under s164, only a shareholder that voted against the adoption of the scheme may enforce its appraisal right.

15. The proxy in this case was completed by “SBSA ITF Nedgroup Investments Private Wealth Property Equity Fund” purportedly as the “registered holders” of the linked Units. It purported further to appoint one Ms Sessions as its proxy to vote against the special resolutions

pertaining to the proposed scheme of arrangement. The proxy was signed by directors of Advisors. The proxy form specifically

stated that it was only for the use of Unit holders who were recorded in HPF’s register. Of course, it was Nominees that was the registered unit holder, but, despite this, the form was filled out in the name of the Fund. Furthermore, and as I have already indicated, it was not signed by the registered shareholder, Nominees, but by Advisors.

16. On 28 August 2015, and purportedly in terms of s164(3), Ms Sessions gave notice to HPF that: “We, Nedgroup Investment Advisors, acting on behalf of the (Fund), which hold (sic) and/or control (sic) and/or are entitled to exercise

voting rights” in respect of the Units, “propose to vote against the … resolutions proposed.” The letter further stated that the necessary proxies and/or letters of representation had been lodged with HPF.

17. Once again, on the face of it the notice contained in the letter appears to be from Advisors, acting on behalf of the Fund. For ease of reference, section 164(3) provides that:

“At any time before a resolution … is to be voted on, a dissenting shareholder may give the company a written notice objecting to the resolution.” (my emphasis)

18. HPF gave notice by way of a letter dated 4 September 2015 in terms of s164(4) that the relevant resolutions had been passed by a majority. This letter was addressed to Advisors. Section 164(5) requires that where a proposed resolution has been adopted, the company must, within 10 days of the adoption, give notice of this to, among others, shareholders who voted against the resolution.

19. On 14 September 2015, Ms Sessions wrote to HPF in a letter headed: “DEMAND - DISSENTING SHAREHOLDERS APPRAISAL RIGHT”. The letter was on an Advisors’ letterhead. It stated that the Fund was the “owner” of the Units. Further, that Advisors was the appointed investment manager for the Fund and was “as such fully authorised to act on behalf of the Fund, in all matters regarding its interests and shareholding in the Company …”. Paragraph 5 of the letter states the following: “The Fund hereby demands that the Company pay the Fund the fair value for all of the shares held by the Fund as per s164 of the Companies Act.”

“A shareholder may demand that the company pay the shareholder the fair value for all of the shares of the company held by that person if- … (a)(i) the shareholder sent the company a notice of objection; …. and … the shareholder voted against the resolution.”

21. In terms of s164(7), the demand must be made within 20 business days of receiving notice under ss(4). The demand is also required to state, among other things, the shareholder’s name and address. This is in terms of ss(8).

22. As is apparent from the letter of demand of 14 September, there is a conspicuous absence of any reference to the registered shareholder. As far as the name and address of the alleged “owner” of the shares is concerned, this was stated to be the Fund, and Advisors claimed to be acting on its behalf in making the demand. No reference was made to Nominees. Furthermore, the Fund is not a legal entity but, despite this, the letter purports to give it the fund legal capacity to authorise Advisors to act on its behalf, and the legal capacity to own the shares. However, none of this seemed to have perturbed HPF or Advisors, and the s164 process continued apace.

23. On 12 October 2015, HPF made a written offer expressly in terms of s164(11) for fair value for the Units. The offer letter was addressed to the Fund, “℅ Advisors”. It contained an offer of R2,90 per share. It stated that the offer would lapse in terms of s164(1)(b) if it was not accepted within 30 business days, being 11 November 2015. Section 164(12)(b) provides, in relevant part that:

“Every offer made under subsection (11) … lapses if it has not been accepted within 30 business days after it was made.”

24. It is common cause that the offer was never accepted. Instead, in November 2015 Advisors instituted the appraisal application in the High Court under s164(14). Ms Sessions deposed to a founding affidavit in support of the appraisal application. The applicant was cited and described as Advisors, “who is authorised to institute applications for and on behalf of (the Fund)”. A resolution of Advisors was attached in support of the litigation, and in support of Ms Sessions’ authority to take all steps on behalf of Advisors as were necessary in the proceedings. The founding affidavit further recorded that Advisors, “through the Trustees, acting through (Nominees)” was the holder of the shares in respect of which the court was requested to make a determination of fair value. In support of this averment, a letter of representation was annexed to the founding affidavit (the FA24 letter of representation). It was dated 28 July 2015, and was on a Standard Bank letterhead. It was signed by a director of Nominees and stated, in relevant part that:

“(Nominees), being a shareholder of (HPF) and acting in accordance with the provisions of the (sic) Section 58(1) of the Companies Act … hereby appoints (Ms Sessions) … to act as its representative in respect of 8 320 397 … Units at the General Meeting to be held on Thursday 30 July 2015.” (my emphasis)

25. Some time later, a “supplementary answering affidavit” was filed. It was deposed to by one Mr Moodley, on behalf of the Trustee. The gist of the affidavit was that its purpose was to “correct” the applicant in the appraisal application. It recorded that, having taken legal advice, Advisors discovered that it had been incorrectly described as the applicant. The applicant should have been described as the Trustee. The affidavit reiterated that the application had been brought on behalf of the Fund, and that this intention had not changed: the only problem was the simple question that the incorrect applicant had been cited, as Advisors were not the trustees of the Fund. Mr Moodley went on to aver that the FA24 letter of representation incorrectly recorded that Nominees was the shareholder of the Units: this was erroneous, he said, as it should have recorded that the Trustee was the shareholder.

26. The attempt to correct the error did not pass muster with HPF. It filed its answering affidavit attacking the locus standi of both Advisors and the Trustee to institute the appraisal application. HPF averred in its answering affidavit at paragraph 46.2 that the only entity that had the option to “exercise” the offer (presumably to accept the offer of fair value made by HPF or not) was Nominees. HPF further took issue with the FA24 letter of representation. The deponent to the answering affidavit averred in this regard that:

“I am advised that this letter has no procedural or substantive value and that (Nominees) does not, by virtue of the letter or at all, authorise the applicant to bring this application or to depose to an affidavit on behalf of (Nominees). It follows that the applicant does not have the necessary locus standi to bring this application.”

27. Further, HPF averred that:

“I am advised that if the applicant does not have locus standi to bring this application then that, in itself, is fatal to the application.”

28. In the founding affidavit in the application before me, the applicants state that when Advisors received HPF’s answering affidavit in the appraisal application, it took legal advice from new lawyers. They confirmed that Advisors lacked locus standi, and that it was not permissible simply to substitute the Trustee as the applicant. Acting on this advice, and to avoid the costs of what the applicants regarded as a “stillborn” application, they withdrew it and tendered costs.

29. This was not the only difficulty raised by Advisors’ new lawyers. They flagged the following additional problems:

29.1. Nominees was the shareholder (as defined in the Act), but the proxy did not record this, instead it recorded the Trustee as the registered shareholder.

29.2. The objection notice sent by Advisors under s163(3) and the demand sent under s164(5) was invalid as they ought to have been sent by Nominees or, at the very least by the Trustee on behalf of Nominees and duly authorised by it.

29.3. The notice further erroneously stated that the Units were held by the Fund, when they were held by Nominees.

30. On the basis of these identified errors, the applicants aver in the present application that Advisors’ attempts at exercising the appraisal rights under s164 were invalid from the outset. As such, the steps taken, including the ill-fated appraisal application had no legal effect on Nominees’ rights in and to the shares, as Nominees had not taken any of the compulsory steps to perfect its appraisal rights. Thus, they say that none of the consequences flowing from a valid enforcement of the appraisal right under s164 could follow and, as such, Nominees rights to the shares substituted under the scheme of arrangement remain valid, enforceable and actionable. The applicants framed their relief accordingly.

THE RELIEF SOUGHT

31. The relief sought by the applicants takes the form of its principal claim, in Part A, and its alternative claim, in Part B.

32. In Part A, the applicants seek an order declaring:

32.1. that Nominees is the holder of the shares in question;

32.2. that Nominees is entitled to exercise all rights in and to and arising out of the shares;

32.3. in particular, that Nominees is entitled to be paid certain sums, arising from distribution declarations made by HPF in the period February 2016 to date; and an order that such sums be paid.

33. The principal claim relies on the applicants’ contention that Advisors’ purported attempt to exercise the appraisal rights in respect of the shares was invalid, irregular, and had no legal effect on Nominees’ shareholding. Nominees was the registered shareholder of the Units, and, when the substitution was effected under the scheme of arrangement it became the registered shareholder of the No Par Value B shares (the substituted shares)[4] with full rights as shareholder, unaffected by whatever legal consequences would have flowed from a valid pursuit of the appraisal right under s164. In these circumstances, the applicants contend that Nominees was legally entitled, as shareholder, to its share of the dividends declared and distributed by HPF between the time that the substitution of shares under the scheme of arrangement took effect until the present. It is common cause that six dividends have been declared and distributed by HPF in this period, and that Nominees was excluded from the distribution.

34. The alternative claim under Part B arises only if the court rejects the main claim and finds, as averred by HPF, that the effect of Advisors’ conduct in pursuing the appraisal rights under s164 is that Nominees lost its full rights as owner and that, in accordance with the scheme of s164, its sole right as shareholder is limited to securing fair value for its shares. In that case, the applicants accept that Nominees would not be entitled to its proportional share in the dividend distributions. However, they contend that they would be entitled to fair value for their shares and their relief in Part B is directed at providing a mechanism for securing this outcome. I should add that the applicants take the view that in this instance, Nominees would no longer be entitled to claim fair value in terms of the s164 procedure. This is because, on their interpretation of s164, that door is now closed to Nominees. However, the applicants say that the same result can be achieved under the rubric of s163 of the Act, with an order fashioned along the lines of s164. I will deal further with this aspect of the Part B relief if and when it becomes necessary.

SECTION 164

35. I have already referred to certain of the provisions of s164 in my discussion of the background facts. I will not repeat those provisions here. They deal with the need for the company contemplating an altered scheme of arrangement affecting shareholding to give shareholders notice; for any shareholder that intends to object to the proposed scheme to give the company notice of its objection; and, if the resolution containing the proposal is nonetheless adopted, for any dissenting shareholder to issue a demand to the company that it be paid out fair value for its shares. It is the registered shareholder (in this case Nominees) who may exercise its right of appraisal by following these steps, and not the beneficial holder of the shares. As I have already indicated, the appraisal right gives a dissenting shareholder the option of exiting the company for fair value rather than it being bound to accept a new scheme of arrangement affecting the nature of its shareholding to which it objects.

36. The notice and demand steps laid down are important stages in the appraisal process. It is only a shareholder who both delivered a notice of objection under ss(3) and who voted against the proposed scheme of arrangement that has the right to make a demand for fair value under ss(5) to (8).

37. There are important legal consequences for a shareholder who takes these steps. This is embodied in ss(9), which provides (in relevant part):

“A shareholder who has sent a demand in terms of subsections (5) and (8) has no further rights in respect of those shares, other than to be paid fair value, unless-

(a) the shareholder withdraws that demand before the company makes an offer under subsection (11), or allows an offer made but the company to lapse, as contemplated in subsection (12)(b) ….” (my emphasis)

38. However, ss(10) ameliorates these legal consequences in certain circumstances. It provides that:

“If any of the events contemplated in subsection (9) occur, all of the shareholder’s rights in respect of the shares are reinstated without interruption.” (my emphasis)

39. The company is required to make an offer of an amount which it considers to be fair value to each shareholder who sent a written demand. This is in terms of ss(11). The offer must be made within a particular time frame.

40. Subsection (12)(b) provides that:

“Every offer made under subsection (11) … lapses if it has not been accepted within 30 business days after it was made.” (my emphasis)

41. If a shareholder accepts the offer ss(12) places obligations on the shareholder to ensure that the shares are transferred to back to the company, and on the company to pay the shareholder the amount accepted as fair value.

42. Subsection (14) is, as I have indicated, the provision that gives a dissenting shareholder the right to approach a court for a determination of fair value. It is clear from the provisions of the section that this right is subject to some limitation, as indicated in the underlined portions set out below:

“A shareholder who has made a demand in terms of subsections (5) and (8) may apply to a court to determine a fair value in respect of the shares that were the subject of that demand, and an order requiring the company to pay the shareholder the fair value so determined, if the company has-

(a) failed to make an offer under subsection (11); or

(b) made an offer that the shareholder considers to be inadequate, and that offer has not lapsed.” (my emphasis)

ISSUES IN THE PRIMARY CLAIM

43. In its primary claim the applicants want an order confirming that despite the occurrence of the events outlined earlier, Nominees, as the registered shareholder, has all its rights in respect of the substituted shares. These rights include its right to share in the dividends that have been distributed to other shareholders in the interim.

44. In order to succeed in its primary claim, the applicants must satisfy the court that the occurrence of the events outlined earlier has not had the legal effect that Nominees’ rights in respect of its shares are limited by ss(9). In other words, that notwithstanding the notice and demand process followed by Advisors, and despite Advisors’ application under ss(14), Nominees retains its full rights in its shares and is not restricted only to a claim for payment of fair value for them.

45. The applicants put forward two bases for their primary relief. In the first place, they say that if Nominee’s rights were restricted under ss(9) as a result of Advisors’ and/or Ms Sessions actions, on a proper interpretation of the relevant provisions of s164, this restriction fell away as a legal consequence of the withdrawal of the ill-fated appraisal application. In the second place, and in the alternative, they say that in any event, neither Advisors nor Ms Sessions had the authority to act on Nominee’s behalf in the first place. Consequently, ss(9) simply never took effect, and Nominees’ rights were never restricted.

46. Flowing from this, two main issues arise:

46.1. The first issue is premised solely on the common cause fact that the appraisal application was inherently fatally flawed, and as a result was still-born, and withdrawn for this reason. The issue is whether, even assuming that the preceding notice and demand were duly authorised by Nominees and were valid, the withdrawal of the fatally flawed appraisal application had the effect under ss(10), read with ss(9)(a), ss(12(b) and ss14(b), of reinstating Nominees’ full rights in its shares without

interruption. This involves an interpretive exercise of the provisions in question, with the parties contending for different

interpretations. For reasons that will become clear, I refer to this as the preliminary issue.

46.2. The second issue only arises if I reject the applicant’s interpretation and find against it on the preliminary issue. In other words, I need only consider the second issue if I find that, properly interpreted, ss(10) did not restore to Nominees its full rights as shareholder as a result of the withdrawal of the appraisal application. In these circumstances, what becomes crucial is the question of whether the preceding notice and demand steps taken under ss(5) to ss(8) were valid. More specifically, where they taken by Advisors and/or Ms Sessions on behalf, and with the authority of Nominees? If not, as the applicants contend (and HPF disputes), Nominees as the shareholder never initiated a valid process to exercise its right of appraisal to begin with. For this reason, the legal consequence is that it retained its full rights in its shares when the scheme of arrangement was implemented, notwithstanding the purported, but invalid, exercise of the right by Advisors and/or Ms Sessions. HPF’s contention is that the preceding steps were validly taken by as Advisors and/or Ms Sessions acted with either the actual authority of Nominees, or Nominees is estopped from contending that they lacked authority.

46.3. As the need to consider the second issue is contingent on the outcome of my determination on the first issue, I refer to it as the subsidiary issue.

THE PRELIMINARY ISSUE

47. It is important to emphasise at the outset that it is common cause that the reason why the appraisal application was withdrawn was because neither Advisors, nor the Trustee had the requisite locus standi to bring the application. It is common cause that only Nominees had locus standi to do so, and that it did not institute a ss(14) application. This issue has nothing to do with whether Ms Sessions or Advisors had the authority (as opposed to the locus standi under ss(14)) to act on behalf of Nominees in initiating the preceding steps in the appraisal process in terms of ss(5) to (8).

Even if they had that authority, if the applicants are correct in their interpretation of the relevant provisions of s164, it was the failure by Nominees to institute a ss(14) application that is determinative of its rights in respect of its shares. Consequently, the preliminary issue may be determined on the assumption that the appraisal process was validly initiated up to,

and including, Advisors’ demand for fair value to the company under ss(5) to (8).

48. The applicants argument on the preliminary issue is premised on the basis that the appraisal application was a legal nullity. They submit that for purposes of determining Nominees’ legal rights in respect its shares, the court should proceed from the premise that there was never an application to court under ss(14). The question then is what are the legal consequences under s164 for a shareholder who may have objected and demanded fair value under ss (5) to (8); who did not accept an offer made by the company under ss(11); but who never went to court under ss(14) for a determination of fair value?

49. The applicants accept that under ss(9) the effect on a shareholder who has validly initiated the appraisal process is to limit its rights in its shares so that the only right it retains is the right to be paid their fair value. However, they point to what they say is an important rider to this limitation in ss(9)(a): this limitation on the shareholder’s rights no longer applies if the shareholder allows an offer made by the company to lapse. Under ss(12)(b), an offer of fair value will lapse if it is not accepted within 30 business days. The applicants point further to the limitation on the right to apply to court for a determination of fair value under ss(14): this right is no longer available to a shareholder who has allowed an offer for fair value from the company to lapse.

50. The applicants submit that it is consequently implicit in ss(14) that a shareholder must institute its application to court within the 30 business days for which the offer remains alive. If the shareholder fails to do so, it loses the right to seek fair value from the court as the offer lapses, and dies, after 30 days. On the applicants’ interpretation of these provisions, a shareholder who has validly pursued the preceding notice and demand steps does not retain an open-ended right to approach the court under ss(14) for an indefinite period. It cannot, after 30 business days has gone by from the offer, proceed to court: the offer has “lapsed" in the plain terms of ss(12)(b). Equally plainly, say the applicants, ss(10) read with ss(9)(a) is clear: where the offer has “lapsed”, all the shareholder’s rights in respect of its shares are reinstated without interruption. In other words, as if the appraisal process had never been triggered.

51. On the applicants’ interpretation of these provisions, the limitation placed by ss(9) on the shareholder’s rights in respect of its shares is only temporary. A shareholder who does not accept a company’s offer, yet wishes to follow through and enforce its appraisal right, must apply to court under ss(14) within 30 business days. The effect of the applicants’ interpretation is that if a shareholder fails to do this, the appraisal process is effectively brought to an end: the temporary restriction on the shareholder’s rights in respect of its shares fall away; its rights in its shares are reinstated as if they had never been limited; and the shareholder is, once more, a shareholder under the new shareholding dispensation, despite its original intention to exit for fair value.

52. HPF contends for a different interpretation of the relevant provisions of s164. It says that in terms of the legislative scheme a shareholder’s rights are fixed from the moment it makes a demand to be paid fair value under ss(7). From that point onwards, under ss(9) the shareholder has no further rights in respect of its shares, save for the right to be paid fair value. HPF contends that consequently, the withdrawal of the appraisal application could have had no effect on Nominees’ rights in respect of the shares: it had already relinquished its full set of rights by its election to demand fair value and to exit the company, rather than to remain a shareholder under the scheme of arrangement. These two options are mutually exclusive. Nominees could not elect to follow one path and then belatedly seek to resurrect its full rights to its shares and to remain as a shareholder. It could never have been the intention of the legislature that a shareholder who had made a valid election by demanding fair value could subsequently be reinstated to its full rights in its shares simply on the basis that its ss(14) application was fatally flawed and a legal nullity.

53. The basic premise of HPF’s interpretation is somewhat undermined by the rider contained in ss(9) which, as I have already noted, makes it clear that, contrary to HPF’s premise, the restriction imposed by that subsection is not absolute: the restriction does not apply if the shareholder has allowed an offer made by the company to lapse.

54. HPF’s answer to this conundrum is two-fold. In the first place, it accepts that ss(9) does not impose an absolute restriction, but it submits that the rider simply does not apply to the right to apply to court for relief under ss(14). HPF contends that ss(14) is to be read as a self-standing or self-contained provision, unrelated to ss(9), ss(10) and ss(12).

55. In the second place, and related to its first point, HPF says that when ss(9) and ss(10) refer to the lapsing of an offer, they really mean, and are meant to apply only to the specific instance where an offer has actually been rejected (and not simply allowed to lapse) within 30 days. So, the argument continues, it is only where a shareholder rejects the offer within 30 days that the offer will “lapse”. It is only in those circumstances that the shareholder’s rights will be reinstated under ss(10). Similarly, it is only in those circumstances that the shareholder will be precluded under ss(14)(b) from pursuing its right to fair value in court. This is because “has not lapsed” in ss(14)(b) has the specific meaning of “has not been rejected”.

56. On HPF’s interpretation, then, provided a shareholder has not “rejected” the offer, there is no time limit within which the ss(14) remedy may be pursued. If there is no “rejection", the 30-day limit has no connection with, or application to ss(14)(b). HPF submitted on this basis that the ss(14) remedy is not only still available to Nominees, but indeed, that it is the only remedy available to it. On the assumption that the demand was valid, the rider in ss(9)(a) has no application. The demand resulted in the permanent limitation of Nominees’ rights in respect of its shares. It can only claim fair value for its shares, and thus it must fail on its principle claim.

57. I trust that I have done no damage, in my explanation of HPF’s interpretation, to Mr Fine’s submissions on behalf of his client when he advanced them to me in argument. Mr Fine submitted further in support of his client’s interpretation that it would be absurd to interpret the provisions as the applicants contended. It would mean that in every case where there was an application under ss(14) the offer would lapse and the shareholder would, contrary to its intention, be forced back into the position of shareholder. It would in every case be denied the opportunity to exit the company against fair value for its shares. This is because, so the argument goes, as a matter of fact, an application under ss(14) could never be completed within the 30-day time limit laid down in ss(12)(b). Therefore, the associated offer invariably would “lapse”, resulting in a reinstitution of rights in terms of ss(10). It was for this reason, he said, that ss(14) should be interpreted as constituting a self-contained provision, which remained open to Nominees to pursue.

58. It is now well settled in our law that statutory interpretation involves a consideration of the language used, the context in which the provision in question appears and the apparent purpose to which that provision is directed.[5] The text, context and purpose must all be considered at the same time.[6] Words in the statute, interpreted purposively and contextually, must be given their ordinary meaning unless to do so would lead to an absurdity.[7] Considering the textual or ordinary grammatical meaning of a provision is to give it a plain, natural and literal interpretation.[8] In cases of ambiguity, a meaning that frustrates the apparent purpose is not to be preferred.[9] Nor is a meaning that unduly strains the ordinary, clear meaning of words.[10]

59. Central to HPF’s interpretation of the provisions in question here is the meaning to be ascribed to ss(12)(b) when it provides that an offer of fair value made by a company “lapses if it has not been accepted within 30 business days after it was made”. More specifically, what does the underlined portion mean?

60. As I have explained, HPF contend that it really means “rejected”. The Oxford English Dictionary gives the following meaning to “accept”: “(to) give an affirmative answer to an offer or proposal; (to) say yes to”. On the other hand, “reject” means: “(to) dismiss as inadequate, unacceptable or faulty; (to) refuse to agree”. On this basis, the ordinary meaning of an offer which “has not been accepted” is an offer to which the the dissenting shareholder has not said yes. HPF’s interpretation would mean that it is only when the absence of an affirmative answer to the offer takes the form of an actual dismissal or refusal (i.e. a “rejection”) that it has lapsed for purposes of s164.

61. This proposed interpretation is contrary to the ordinary, grammatical meaning. It seems to me, then, that on the plain words used in ss(12)(b), an offer is open for acceptance for 30 business days after it has been made. At the end of those 30 days, in the absence of an acceptance by the dissenting shareholder, the offer lapses. This is regardless of whether the shareholder has actually dismissed or refused the offer or not.

62. In addition to the text of ss(12)(b), I must consider the context and purpose of that provision. There is a clear structural and contextual link between ss12(b) and ss(9)(a), ss(10) and ss(14)(b). All of the latter three subsections refer, and assign a consequence to the lapsing of an offer. So, under ss(9)(a), unless a dissenting shareholder allows an offer to lapse, its full rights in respect of its shares are limited to the right to obtain fair value. Under ss(10), those full rights will be reinstated if the offer lapses. Subsection (14)(b) prohibits a dissenting shareholder from approaching the court for a determination of fair value after the offer has lapsed.

63. The abundantly clear contextual link between these sections has two consequences. First, it puts paid to HPF’s submission that ss(14) is a stand-alone provision that must be interpreted and applied separately from ss(9), (10) and (12)(b). To accept that proposition would be to do damage to the clear structure of s164. Second, it means that the the reference to “an offer that has not lapsed” in ss(14)(b) must have the same meaning as similar references to a lapsed offer in the other subsections.

64. It follows from the above that the right of a dissenting shareholder to approach the court under ss(14) must be exercised before the expiry of the 30-day period prescribed under ss(12)(b). If it does not do so, the offer will have lapsed and under ss(14)(b) the shareholder is precluded from applying to court. For this reason, HPF’s submission that it remains open to Nominees to approach the court under ss(14) is incorrect. Nominees was required to exercise that right within the 30-day period prescribed in ss(14)(b) read with ss(12)(b). That period has passed, and the remedy is no longer available to it.

65. This interpretation is consistent with the scheme and purpose of s164. The section effectively gives a shareholder who did not support a resolution to adopt a scheme of arrangement the right to opt out of the consequences of that scheme even though the majority of shareholders supported it. The section balances two interests: on the one hand, the right of the dissenting shareholder to opt out of the scheme of arrangement by exiting its shareholding, and on the other hand, the interests of the company to implement the scheme that enjoyed the support of the majority of shareholders.

66. Section 164 balances these interests in a number of ways. It prescribes time limits for the exercise by a dissenting shareholder of its right of appraisal. Critically, it requires the shareholder either to accept an offer of fair value made by the company within 30 business days, or to enforce its right to pursue what it regards to be fair value for its shares within that time period. This is the purpose of ss(12)(b) read with ss(14)(b). If the shareholder fails to institute a ss(14) application within this time, it effectively loses its right to exit its shareholding and to demand fair value. In this instance, ss(10) reinstates the dissenting shareholder’s full rights in respect of its shares. Thus, the default position is that if a shareholder fails to pursue its right appraisal within the prescripts of s164, the scheme of arrangement adopted by the majority of shareholders simply follows the normal course.

67. In terms of this scheme, a demand for fair value under ss(5) to (8) is only a preliminary, but necessary, step in the process. If the dissenting shareholder does not accept an offer of fair value from the company it must take a further step if it wants to pursue its right of appraisal: it must institute an application to court under ss(14) for a determination of fair value within 30 business days. Once it does this it has a vested right to exit its shareholding in exchange for the fair value determined by the court.

68. Contrary to HPF’s submissions, there is no absurdity in this interpretation of s164. Subsection (10) read with ss(12)(b), as I have interpreted it, does not have the effect of undermining the right to pursue a determination of fair value in court. It does not abolish a shareholder’s right of appraisal in circumstances where a ss(14) application has been validly and timeously

instituted. In those circumstances, the appraisal right remains vested in the dissenting shareholder while awaiting a determination

by the court. Subsection (10) on its plain terms does not remove any rights held by a dissenting shareholder: it adds back the full suite of rights. The purpose of ss(10) is simply to prescribe what the default position is in the event that a dissenting shareholder does not accept an offer for fair value and fails to institute an application to court within the prescripts of ss(14).

69. For a dissenting shareholder who has applied to court under ss(14) its rights are not practically affected by ss(10). By applying to court under ss(14), a dissenting shareholder puts a legal peg in its election to exit its shareholding for fair value to be determined by the court. It is at this point that it is bound by its election, not, as HPF contended, when it makes its demand under ss(5) to (8). Therefore, for all practical legal purposes, a shareholder in this position has only the restricted right to fair value flowing from its election to pursue an enforcement of this right in court.

70. For these reasons I am unpersuaded by the interpretation advanced by HPF. In my view, the interpretation placed on the relevant provisions of s164 by the applicants is to be preferred. Nominees was the registered shareholder. Regardless of any intention it may have had to exit its shareholding against fair value for its shares, it was legally required to follow the prescribed process in order to enforce its right of appraisal under s164. Critical to the enforcement of this right was the requirement that, if it did not want to accept HPF’s offer of fair value, it had to apply to court for a determination of fair value before the end of the 30-day period prescribed in ss(14)(b), read with ss(12)(b). Advisors’ application to court did not meet this requirement as it was not the registered shareholder. It is common cause that there was no application by Nominees within the prescribed period. Consequently, it lost its right to approach the court for a determination of fair value. This triggered the default position under ss(10), in terms of which Nominees was reinstated to its full rights in respect of its shares.

71. For these reasons, I am of the view that Nominees must succeed on the preliminary issue.

72. There is one particular issue that remains to be considered in respect of the primary relief sought in Part A of the Notice of Motion. HPF contends that even if Nominees is reinstated to is full rights in respect of its shares, it is not entitled to payment of its share of the dividends that have been distributed to shareholders in the interim. It contends that Nominees waived its right to the dividends.

DID NOMINEES WAIVE ITS RIGHT TO DIVIDENDS?

73. HPF relies on exchanges of emails between the parties concerning dividend distributions. In these emails HPF advised the applicants of the dividends that had been declared and, based on the fact that the Fund had exercised its appraisal rights under s164, HPF asked the applicants for confirmation that it should be excluded from the distribution. This process was repeated a number of times in relation to the various dividend distributions made, between approximately March 2016 to approximately December 2017. The applicants confirmed the exclusion in response to each request. In respect of one of the requests, the applicants noted: “Yes, it is excluded for now. We will be recovering the dividend from HP(F) later this year, we need to first get through some legal hurdles.”

74. I will assume, for present purposes that it was Nominees that gave or authorised these responses. In its replying affidavit Nominees disputed this, and it is difficult to tell from the emails exchanged whether the response was from Advisors, the Trustee or Nominees. Be that as it may, the premise of the requests for confirmation of Nominees exclusion from the distribution of dividends was the purported valid exercise of the appraisal right. HPF submitted that its waiver defence was supplemental to its election defence, viz. that from the time the demand was made, Nominees had made its election and was bound by it: its election constituted a waiver of the dividends flowing from its waiver of its full rights in respect of its shares.

75. From my findings above, it is clear that Nominees only had 30 business days after HPF’s offer within which to apply to court under ss(14) or to lose its entitlement to enforce its appraisal right in court. It failed to do so. In addition, I have dismissed HPF’s contention that a demand under ss(5) to (8) by a dissenting shareholder constitutes a binding election to give up all its rights in its shares save for the right to obtain fair value. Thus, insofar as HPF relies on its waiver defence as being supplemental to its election defence, it must fail.

76. There are further difficulties for HPF even if one takes into account the alleged express waivers they rely on in the emails exchanged between the parties referred to earlier. The effect of my findings on the preliminary issue is that HPF’s request for the applicants’ confirmation of exclusion from the periodic dividend payments was made on the incorrect premise: the request was made on the premise that valid steps to enforce its right of appraisal had been taken under s164. The responses to confirm the exclusions were also made on the incorrect premise that the steps that had been taken to enforce the right of appraisal were valid and that a court would make a determination of fair value for the shares. It is difficult to understand how, in these circumstances, Nominees can be held to have waived its rights to the dividend payments.

77. Waiver requires the party relying on it to satisfy the court that the other party, with full knowledge of its rights, decided to abandon them.[11] It must be clearly proved that the person who is alleged to have waived its rights knew what those rights were.[12] According to Christie[13] the following dictum may be taken to be a correct statement of the law:

“The necessity for a full knowledge of the law in the case of waiver follows from the principle that waiver is a form of contract, in which one party is taken deliberately to have surrendered his rights: there must therefore be proof of an intention so to surrender, which can only exist where there is knowledge both of the facts and the legal consequences thereof.”[14]

78. In the present case, all parties were mistaken as to the validity of the underlying enforcement of Nominees’ right of appraisal. In the circumstances, Nominees cannot be said to have had the requisite knowledge of the legal consequences of any waiver on its part of its rights in its shares. It cannot be said that had Nominees known that the steps taken under s164 were invalid and that it had lost its right to seek a declaration of fair value from the court it would nonetheless have expressly agreed to its exclusion from the dividend payments.

79. For these reasons too HPF’s reliance on waiver to prevent Nominees from payment of its proportionate share of the dividends must fail.

80. Flowing from my above findings, Nominees is entitled to the relief it seeks under Part A of the notice of motion on the basis of the preliminary issue.

THE SUBSIDIARY ISSUE

81. As I explained earlier, my finding in favour of the applicants on the preliminary issue renders it unnecessary for me to consider the subsidiary issue. However, in the event that I may be wrong on my interpretation of the relevant provisions of s164, I nonetheless give the subsidiary issue consideration. For reasons that will appear shortly, the subsidiary issue may be disposed of relatively briefly.

82. The question under this head is whether Advisors and/or Ms Sessions acted with the authority of Nominees in taking the necessary steps to enforce the appraisal right under s164. Alternatively, whether Nominees represented to HPF that they had such authority in circumstances which warrant that Nominees should be estopped from disclaiming that authority. I have already set out the background facts that pertain to this issue and they need not be repeated in any detail again here. HPF relies, in particular, on the FA24 letter of representation and the proxy form as its basis for contending that Ms Sessions and/or Advisors had the authority of Nominees to proceed to exercise Nominees rights under s164.

83. It is most doubtful that either of these documents gave Ms Sessions Nominees’ authority to act on its behalf. The proxy does not mention Nominees at all. The entity giving the authority for Ms Sessions to stand in as its proxy was “SBSA ITF Nedgroup Investments Private Property Equity Fund”. On its face, this is a reference to the Trustee on behalf of the Fund, not Nominees. What reinforces this conclusion is that the proxy form is signed by Advisors, and it was Advisors that claimed consistently to have the authority to act on behalf of the Fund.

84. The only document that emanates from Nominees on its face is the FA24 letter of representation. However, as HPF itself pointed out in the answering affidavit in the appraisal application, this letter only authorised Ms Sessions to act on behalf of Nominees at the general meeting on 21 August 2015, and no more. On its face, it gives no authority to Ms Sessions to take any of the steps required under s164 to enforce the right of appraisal on behalf of Nominees.

85. If one considers the events as they unfolded, it is apparent that all parties involved assumed that as Advisors could act on behalf of the Fund (as the beneficiary of the shares through the Trustee), it was the correct entity to invoke the right of appraisal. This was why Advisors was so prominent in the process, even going so far as to institute the appraisal application on behalf of the Fund. In these circumstances, it is highly improbable that any attention was paid to the necessity to obtain the authorisation of Nominees: the fact of the matter is that the parties made an incorrect legal assumption which meant that Nominees’ authority was never considered to be necessary at all.

86. Even if there were some material dispute about whether the proxy gave Ms Sessions the authority to vote on the resolution on behalf of Nominees, this takes the matter no further for HPF. It was clearly only an authorisation for the vote and no more: it was not authority to take any steps under s164 to enforce Nominees’ right of appraisal. The FA24 letter of representation suffered the same fate.

87. To make matters even clearer are the notice of objection and the letter of demand. The notice of objection was required under ss(3) as a necessary first step in the exercise of the right of appraisal. The notice was sent by Advisors, under the hand of Ms Sessions, expressly “for Nedgroup Investment Advisors (Pty) Ltd”, i.e. Advisors. It recorded that Advisors acted on behalf of the Fund which is entitled to exercise voting rights in respect of the Units. The notice was quite obviously not on behalf of Nominees as the registered shareholder, which was the person required to give the notice of objection under ss(3).

88. Similarly, and for the same reasons, the demand was quite obviously not on behalf of Nominees as the registered shareholder with the rights and obligations established under ss(5) to (8): the demand was expressly made on behalf of the Fund, with Advisors recording that it had the authority of the Fund to make the demand in respect of its (the Fund’s) shareholding.

89. It follows that even even if, contrary to my finding on the preliminary issue, HPF are correct that it is the demand that binds a shareholder to its election to exercise the right of appraisal, Nominees never gave the requisite notice and demand. In the circumstances, the obligatory preliminary steps for the exercise of the right of appraisal were never taken, and there was no valid enforcement of the right. Consequently, ss(9) never took effect to limit Nominees’ rights in respect of its shares.

90. Nor can it be said that the notice and demand constituted a representation by Nominees that Advisors had the authority to act on its behalf in sending the notice and demand. A representation of that nature is simply absent from these documents. Even if read against the backdrop of the proxy and FA24 letter of representation, there is no such representation by Nominees. As I have already noted, both of these latter documents are expressly limited in the ambit of the authority granted. For this reason, I am unable to find that that HPF have established a basis for succeeding in their defence that Nominees are precluded from denying the authorisation on the basis of estoppel.

91. Finally, on the subsidiary issue, HPF contended that in terms of clause 7.1 of the Deed, either the Trustee or Nominees were entitled to delegate their authority in respect of the shares to Advisors. In other words, it was sufficient in terms of the Deed for the Trustee to have done the authorisation, and Nominees authorisation was not necessary. Clause 7.1 reads, in relevant part:

“On being furnished with such reasonable indemnity against costs as the trustee/custodian may require, the trustee/custodian may delegate to the manager or its nominee the right to attend or to vote at a meeting of an issuer of assets … and to take part in or consent to any action of an issuer of such assets.”

92. The Deed was entered into between the Manager and the Trustee. It is unclear to me how clause 7.1 is supposed to be read so as to have the effect of permitting the Trustee (to the exclusion of Nominees) validly to authorise Advisors to act on behalf of the registered shareholder. It might be that this would be the effect if the Trustee was the registered shareholder. However, s164 requires the registered shareholder to take the requisite steps to enforce the right of appraisal. Clause 7.1 could never be read as permitting the Trustee to authorise that which it has no power under s164 to do.

93. In any event, clause 14.1 of the Deed gives clarity to clause 7.1. It provides, in relevant part that:

“The assets of a portfolio must be registered either in the name of the trustee/custodian or with the written consent of the registrar in the name of a nominee company of the trustee/custodian. Any reference in this deed to the trustee/custodian in relation to vesting, registration or holding in its name of assets, or to rights, powers and obligations as registered owner of the assets is, unless inconsistent with the context, deemed also to be a reference to the said nominee company …”. (my emphasis)

94. It seems plain to me that the purpose of clause 14.1 is to make it clear that when assets, like shares, are registered in the name of a nominee company, like Nominees, the word “nominee” where it appears elsewhere, must be read instead of “trustee/custodian”. In other words, the purpose is to align the legal position set out in the deed with the normal legal consequences that flow from being the registered owner of shares. Normally it is the nominee registered shareholder that has the requisite rights. Put plainly, clause 14.1 is a general clause aimed at avoiding the necessity of the Deed having to record, in each instance where the phrase “trustee/custodian” is used in respect of rights relating to assets, the additional phrase “or, in the case where the assets are registered in the name of a nominee company, such nominee company”.

95. I conclude, therefore, that clauses 7.1 and 14.1 of the Deed do not permit the Trustee to delegate to a third party the rights in assets registered to a nominee company. In other words, the Deed did not give the Trustee the power to give authority to Advisors to act on behalf of Nominees to pursue the right of appraisal in respect of the shares registered to Nominees. It follows that this defence, too, must fail.

CONCLUSION AND ORDER

96. My primary finding in this judgment is that the applicants are entitled to the relief they seek under Part A of the Notice of Motion on the basis that on a proper interpretation of s164 Nominees, as the registered shareholder was required to institute an application under ss(14) within 30 business days of the offer of fair value made by HPF. Nominees failed to do so. The legal effect of this failure is that Nominees lost its right of appraisal, as the remedy under ss(14) is no longer open to it to pursue. Consequently, in terms of ss(10), and as a result of Nominees allowing the offer to lapse, its rights in respect of its shares were reinstated without interruption.

97. The effect of the restoration of Nominees’ rights without interruption is that it is entitled to be paid its share of the dividends that were distributed by HPF from the time that the Units were substituted with No Par Value B shares. As to the method of calculation of the distributions to which Nominees is entitled, my order makes provision for the parties either to agree on the calculation of the amounts due, or, if they cannot do so, to appoint a mutually acceptable appropriate professional to determine the calculation.

98. In the alternative, and in the event that I am wrong in my interpretation of the relevant provisions of s164, I find, nonetheless, that the applicants are entitled to the relief they seek under Part A. I find in this regard that the prerequisite steps that must be carried out in terms of the appraisal process established under s164 were not taken with the authority of the registered shareholder, Nominees. Consequently, there was no valid enforcement of the right of appraisal. I find, too, that Nominees is not estopped from relying on the absence of authority to found its claim.

99. I make the following order:

1. It is declared that:

1.1 the first applicant is the holder of the 2 377 256 No Par Value B Shares in the issued share capital of the respondent (“the shares”);

1.2 the first applicant is entitled to exercise all rights in and to and arising out of its holding of the shares;

1.3 in particular, the first applicant is entitled to be paid its proportionate share of the distribution declarations made by the

directors of the respondent in the period February 2016 to date (“the dividends”).

2. The amounts of the dividends to be paid to the first applicant will be calculated as agreed by the parties, failing which by a mutually acceptable appropriate professional appointed by them.

3. The respondent is ordered to pay the costs of the applicants.

__________________________________________

R M KEIGHTLEY

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

Date Heard: 15 May 2019

Date of Judgment: 12 June 2019

Counsel for the Applicants: RDE Gordon

Instructed by: Pike Law

Counsel for Respondent: D Fine (SC)

Z Minty

Instructed by: Edward Nathan Sonnenbergs

[1] Section 114(1).

[2] See the discussion at the commencement of the commentary on s164 in Delport et al, Henochsberg on the Companies Act, 2008 (Issue 14) at 577-8 (hereafter, Henochsberg)

[3] The relevant sections regulating the notice and demand are discussed below.

[4] It is common cause that Nominees is the registered shareholder in respect of the substituted shares.

[5] Road Traffic Management Corporation v Waymark (Pty) Ltd [2018] ZACC 12 at para 29

[6] Waymark, para 31

[7] Cool Ideas 1186 CC v Hubbard 2014 (4) SA 474 (CC) at para 28

[8] Waymark, at para 33, citing Rand Rietfontein Estates Ltd v Cohn 1937 AD 317 at 321

[9] Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) at para 18, cited in Waymark at para 31

[10] Endumeni at para 25, Waymark at para 31

[11] Laws v Rutherford 1924 AD 261 at 263

[12] GB Bradfield Christie’s Law of Contract in South Africa (7ed) pg512 (“Christie”); Gordon v AA Mutual Insurance Association Ltd 1988 (1) SA 398 (W); Feinstein v Niggli 1981 (2) SA 684 (A) at 698F”)

[13] Above, pg512

[14] Ex parte Sussens 1941 TPD 15 at 20