Strickland v Industrial Development Corporation of South Africa Ltd (09/02/01) [2002] ZAGPHC 21 (29 May 2002)

Strickland v Industrial Development Corporation of South Africa Ltd (09/02/01) [2002] ZAGPHC 21 (29 May 2002)

The court found that the offer to purchase shares was bona fide, as the discrepancy between the applicant's valuation and the offer price was not substantial and the transaction was supported by major creditors and shareholders. The applicant failed to establish the existence of a tacit term entitling insiders to match outside offers, as such a provision was deliberately excluded from the final shareholders' agreement. The balance of convenience favoured allowing the transaction to proceed, given the financial difficulties of the company and the scale of the transaction. Accordingly, the application for an interim interdict was dismissed.

Citation
[2002] ZAGPHC 21
Parties
Applicant: Brian Nevin Strickland; Respondent: Industrial Development Corporation of South Africa Ltd; Respondent: Nedcor Bank Limited; Respondent: Teamcort (Pty) Ltd
Court
High Courts - Gauteng
Jurisdiction
South Africa
Judgment Date
29 May 2002
Case Number
8709/02
Procedural Posture
Urgent Application / Application for Interim Interdict Pending Outcome of Part B
Outcome
Application dismissed with costs, including costs of two counsel.
Judges
Willis
Legal Topics
Shareholders Agreement, Pre Emptive Rights, Bona Fide Offer, Tacit Terms, Interdict, Costs of Two Counsel
Commercial and Corporate Civil Procedure Shareholders Agreement Pre Emptive Rights Bona Fide Offer Tacit Terms Interdict Costs of Two Counsel

Case Brief

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Parties

Brian Nevin Strickland

Applicant

Industrial Development Corporation of South Africa Ltd

Respondent

Nedcor Bank Limited

Respondent

Teamcort (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Application for Interim Interdict Pending Outcome of Part B

Legal Issues

  1. 1 Whether the offer to purchase shares was a bona fide offer within the meaning of the shareholders' agreement.
  2. 2 Whether a tacit term existed entitling an insider shareholder to match any outside offer for shares.
  3. 3 Whether the applicant is entitled to an interim interdict restraining the share transaction pending further proceedings.

Ratio Decidendi

The court found that the offer to purchase shares was bona fide, as the discrepancy between the applicant's valuation and the offer price was not substantial and the transaction was supported by major creditors and shareholders. The applicant failed to establish the existence of a tacit term entitling insiders to match outside offers, as such a provision was deliberately excluded from the final shareholders' agreement. The balance of convenience favoured allowing the transaction to proceed, given the financial difficulties of the company and the scale of the transaction. Accordingly, the application for an interim interdict was dismissed.

Court Disposition

Application dismissed with costs, including costs of two counsel.

Orders

  • The application is dismissed with costs, which costs are to include the costs of two counsel.