South Africa Case Law

Edmunds and Another v Supreme Mouldings Investments (Pty) Ltd and Another (2021/36175)

Edmunds and Another v Supreme Mouldings Investments (Pty) Ltd and Another (2021/36175) [2023] ZAGPJHC 635 (5 June 2023)

Court

South Gauteng High Court, Johannesburg

Case number

2021/36175

Judge

Gilbert AJ

Minority shareholders sought repurchase relief under section 163 after irregular financial assistance transactions. The High Court dismissed the application, finding no unfair prejudice shown.

• Oppressive Conduct
• Minority Shareholder Relief
• Section 163 Companies Act
• Financial Assistance
• Share Valuation
• Corporate Governance

Constantia Insurance Company Limited v The Master of the High Court, Johannesburg and Others (512/2021)

Constantia Insurance Company Limited v The Master of the High Court, Johannesburg and Others (512/2021) [2022] ZASCA 179; 2023 (5) SA 88 (SCA) (13 December 2022)

Court

Supreme Court of Appeal

Case number

512/2021

Judges

Van der Merwe, Plasket, Basson

The Supreme Court of Appeal held that the indemnity provided by Protech Investments to Constantia constituted indirect financial assistance to a related company, Protech Khuthele, within the meaning of section 45(1)(a) of the Companies Act. The board of Protech Investments did not adopt a resolution authorising the indemnity nor did it satisfy itself of the solvency, liquidity, and fairness requirements as required by section 45(3)(b). The only resolution produced was by Protech Holdings, which did not suffice. The requirements not met were substantive, not merely formal or procedural, so sec…

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• Expungement Of Claims
• Financial Assistance
• Board Resolutions
• Solvency And Liquidity Test
• Arbitrary Deprivation Of Property
• Indemnity Agreements

Van Den Heerden N.O. and Others v Van Tonder (A5076/2018; 407461/2015)

Van Den Heerden N.O. and Others v Van Tonder (A5076/2018; 407461/2015) [2021] ZAGPJHC 486 (20 April 2021)

Court

South Gauteng High Court, Johannesburg

Case number

A5076/2018; 407461/2015

Judges

Windell, MIA, MDALANA-MAYISELA

The court held that the respondent, as business rescue practitioner, breached section 134 of the Companies Act by disposing of Boabab's book debts without obtaining Lombard Insurance's prior consent. However, the respondent acted in accordance with the established practices of the Group, in good faith, and with the bona fide belief that such payments were necessary to keep the companies trading and to attempt a rescue. The respondent relied on legal advice and operated under significant constraints, including incomplete financial records and lack of support from directors. The court found tha…

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• Business Rescue
• Fiduciary Duties
• Financial Assistance
• Disposal Of Secured Assets
• Director Liability
• Statutory Interpretation

Hacker v Hartmann and Others (1415/2017)

Hacker v Hartmann and Others (1415/2017) [2019] ZAECPEHC 22 (10 April 2019)

Court

Eastern Cape High Court, Port Elizabeth

Case number

1415/2017

Judge

Majiki

High Court case on delinquent-director relief, section 45 financial assistance, and striking-out of scandalous affidavit material.

• Delinquent Director
• Financial Assistance
• Companies Act Section 45
• Derivative Action
• Board Authority
• Striking Out Scandalous Matter

Booysen and Others v Kohrs and Others (59732/2016)

Booysen and Others v Kohrs and Others (59732/2016) [2016] ZAGPPHC 871 (22 September 2016)

Court

North Gauteng High Court, Pretoria

Case number

59732/2016

Judge

Pretorius

The court found that the delegation agreement constituted financial assistance for the purchase of shares, falling squarely within the ambit of section 44 of the Companies Act 71 of 2008. The company failed to comply with statutory requirements, including the absence of a special resolution and failure to satisfy the solvency and liquidity test. As a result, the shareholders agreement, sale of shares agreement, and delegation agreement were declared void. Consequently, the restraint of trade clause, being part of the void shareholders agreement, was unenforceable. The applicants' locus standi…

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• Restraint Of Trade
• Shareholders Agreement
• Financial Assistance
• Solvency And Liquidity Test
• Companies Act Compliance

Swissinc AG (Pty) Limited and Others v Jupiter 8 Commercial Trust and Others (2013/4487)

Swissinc AG (Pty) Limited and Others v Jupiter 8 Commercial Trust and Others (2013/4487) [2013] ZAGPJHC 296 (6 December 2013)

Court

South Gauteng High Court, Johannesburg

Case number

2013/4487

Judge

AC Basson

The court found a binding settlement agreement for Van Breda’s exit, rejected the oppression and section 44 challenges, and granted the counter-application.

• Shareholder Disputes
• Oppressive Conduct
• Settlement Agreement
• Financial Assistance
• Winding Up
• Companies Act Section 163

New Republic Bank Ltd v Rossiter (7332/2009)

New Republic Bank Ltd v Rossiter (7332/2009) [2010] ZAKZDHC 77 (13 December 2010)

Court

Kwazulu-Natal High Court, Durban

Case number

7332/2009

Judge

K Swain

The court found that the clauses in the agreement were not sufficiently clear to resolve the dispute regarding the existence of a cession without reference to evidence of surrounding circumstances. Therefore, the first, second, and third complaints of the excipient regarding vagueness and embarrassment in the defendant's plea and counterclaim were dismissed. However, the court held that the allegations relating to the contravention of section 38(1) of the Companies Act were vague and embarrassing, as the defendant failed to specify the basis for the alleged contravention. Accordingly, the fou…

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• Exception Procedure
• Cession Of Claims
• Interpretation Of Contracts
• Financial Assistance
• Companies Act Section 38

New Republic Bank Ltd v Rossiter (7332/2009)

New Republic Bank Ltd v Rossiter (7332/2009) [2010] ZAKZDHC 75 (13 December 2010)

Court

Kwazulu-Natal High Court, Durban

Case number

7332/2009

Judge

K Swain

High Court exception ruling on whether a pleading about cession and alleged section 38 contravention was vague and embarrassing.

• Exception Procedure
• Cession Of Claims
• Vagueness And Embarrassment
• Contract Interpretation
• Financial Assistance
• Companies Act Section 38

Levitan v Mopana Properties 69 (Pty) Ltd and Others (09/46494)

Levitan v Mopana Properties 69 (Pty) Ltd and Others (09/46494) [2009] ZAGPJHC 103 (10 December 2009)

Court

South Gauteng High Court, Johannesburg

Case number

09/46494

Judge

P.A. Meyer

The court set aside the voluntary winding-up of Mopana Properties 69 (Pty) Ltd, rejected the respondents’ financial-assistance and non-joinder arguments, and awarded punitive costs.

• Winding Up Of Company
• Shareholders Agreement
• Financial Assistance
• Non Joinder
• Punitive Costs
• Company-winding-up

Gardner and Another v Margo (549/04)

Gardner and Another v Margo (549/04) [2006] ZASCA 36; [2006] 3 All SA 229 (SCA); 2006 (6) SA 33 (SCA) (28 March 2006)

Court

Supreme Court of Appeal

Case number

549/04

Judges

Scott, Zulman, Van Heerden, Maya, Cachalia

The Supreme Court of Appeal interpreted a share-sale mandate as entitling the seller to 40 cents per share, with excess proceeds payable to OTR, and upheld OTR's secondary guarantor liability.

• Contract Interpretation
• Company Guarantee
• Financial Assistance
• Mandate
• Rectification
• Unjust Enrichment