South Africa Case Law

Mkhize and Others v Kwandile Resources (Pty) Ltd (2023/005460)

Mkhize and Others v Kwandile Resources (Pty) Ltd (2023/005460) [2024] ZAGPJHC 1013 (7 October 2024)

Court

South Gauteng High Court, Johannesburg

Case number

2023/005460

Judge

Nico van der Walt

The court found that the directors' terms were not automatically limited by the amendment to the memorandum of incorporation; a further positive step by shareholders was required to remove or appoint directors. The directors who signed the round-robin resolution were validly appointed at the relevant time. The institution of the main application did not require a special resolution by shareholders, as the risk or exposure contemplated by the memorandum was not established on the facts. The round-robin resolution was validly adopted by a majority of eligible directors, excluding Mr Mkhize due…

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• Authority Of Attorneys
• Memorandum Of Incorporation Interpretation
• Board Resolutions
• Director Term Limits
• Special Resolution Requirement

Zelbree Investments (PTY) Limited and Others v Theunissen (A3034/2020)

Zelbree Investments (PTY) Limited and Others v Theunissen (A3034/2020) [2022] ZAGPJHC 877 (15 November 2022)

Court

South Gauteng High Court, Johannesburg

Case number

A3034/2020

Judges

Adams, Van Aswegen

High Court appeal on director remuneration under section 66(9) of the Companies Act upheld the special plea: no special resolution meant no director’s fees.

• Director Remuneration
• Companies Act Section 66
• Special Resolution Requirement
• Appealability Of Orders
• Director-remuneration
• Companies-act-section-66

Central Developments Tshwane (Pty) Ltd and Another v Body Corporate, Twee Riviere Aftree Oord (635/2019)

Central Developments Tshwane (Pty) Ltd and Another v Body Corporate, Twee Riviere Aftree Oord (635/2019) [2020] ZASCA 107 (21 September 2020)

Court

Supreme Court of Appeal

Case number

635/2019

Judges

Wallis, Molemela, Plasket, Ledwaba, Unterhalter

The Supreme Court of Appeal held that the Body Corporate's power to institute proceedings for damage to common property is conferred by section 2(7)(b) of the Sectional Title Schemes Management Act, and is not subject to the requirement of a special resolution under section 2(7)(e). The special plea was based on a misconception of the statutory scheme, as the power to sue for damage to common property exists independently of the special resolution requirement, which applies only to other types of claims against the developer. The appeal was dismissed, and the orders relating to ratification a…

Source excerpt

• Sectional Title Schemes Management Act
• Body Corporate Powers
• Special Resolution Requirement
• Developer Liability
• Damage To Common Property
• Ratification Of Resolution

Marib Holdings (Pty) Ltd v Parring NO and Others (22058/2019)

Marib Holdings (Pty) Ltd v Parring NO and Others (22058/2019) [2020] ZAWCHC 74 (7 August 2020)

Court

Western Cape High Court, Cape Town

Case number

22058/2019

Judge

Francis

The High Court refused to set aside a section 165 demand seeking recovery of directors’ remuneration allegedly paid without the required shareholder resolution.

• Companies Act Section 165
• Directors Remuneration
• Special Resolution Requirement
• Derivative Action
• Fiduciary Duties
• Corporate Governance

Sunrise View Home Owners Association NPC and Another v Nepemalo (Pty) Ltd and Another (46279/2016)

Sunrise View Home Owners Association NPC and Another v Nepemalo (Pty) Ltd and Another (46279/2016) [2017] ZAGPPHC 351 (24 March 2017)

Court

North Gauteng High Court, Pretoria

Case number

46279/2016

Judge

AC Basson

The High Court held that a body corporate needed a special resolution to sue a developer under section 36(6)(e), so the interlocutory application succeeded.

• Sectional Titles Act
• Locus Standi
• Special Resolution Requirement
• Body Corporate Powers
• Sectional-titles-act
• Locus-standi

Culverwell N.O and Others v Bidvest Properties (Pty) Ltd and Others (82188A/2014)

Culverwell N.O and Others v Bidvest Properties (Pty) Ltd and Others (82188A/2014) [2015] ZAGPPHC 989 (4 September 2015)

Court

North Gauteng High Court, Pretoria

Case number

82188A/2014

Judge

JJ Strijdom

The High Court dismissed an application to stop transfer of property, finding the Companies Act 1973 applied and res judicata barred renewed challenges.

• Company Asset Disposal
• Special Resolution Requirement
• Res Judicata
• Enforcement Of Judgments
• Transfer Of Property
• Res-judicata

Stand 242 Hendrik Potgieter Road Ruimsig Pty) Ltd v Göbel NO and Others (2011 (5) SA 1 (SCA);

Stand 242 Hendrik Potgieter Road Ruimsig Pty) Ltd v Göbel NO and Others (2011 (5) SA 1 (SCA); [2011] 3 All SA 549 (SCA)) [2011] ZASCA 105; 246/10 (1 June 2011)

Court

Supreme Court of Appeal

Case number

246/10

Judges

Brand, Lewis, Maya, Tshiqi, Petse

Section 228 of the Companies Act 61 of 1973, as amended, unambiguously requires that the disposal of the whole or greater part of a company's assets must be authorized or ratified by a special resolution of shareholders. The purpose of this provision is to protect shareholders from unauthorized disposals by directors. The Turquand rule, which allows third parties to assume compliance with internal company procedures, does not apply to section 228, as its application would defeat the statutory protection afforded to shareholders. Similarly, estoppel cannot be invoked to circumvent statutory re…

Source excerpt

• Companies Act Section 228
• Turquand Rule
• Shareholder Protection
• Special Resolution Requirement
• Estoppel
• Director Authority

Simcha Properties 6 CC v San Marcus Properties (Pty) Ltd (256/09)

Simcha Properties 6 CC v San Marcus Properties (Pty) Ltd (256/09) [2010] ZASCA 54; [2011] 1 All SA 287 (SCA) (31 March 2010)

Court

Supreme Court of Appeal

Case number

256/09

Judges

Lewis, Mlambo, Hurt, Griesel, Seriti

The court held that the director of the respondent company was properly authorised to conclude the reinstatement agreement by virtue of resolutions passed by the sole shareholder in June and October 2007. These resolutions explicitly empowered the director to dispose of the company's sole asset and to sign all necessary documents to give effect to the transaction. The principle of unanimous assent applied, given that the company had only one shareholder, making formal meetings unnecessary. The reinstatement agreement was not a new transaction but a continuation of the original sale, and the e…

Source excerpt

• Companies Act Section 228
• Director Authorisation
• Unanimous Assent
• Ratification Of Contract
• Special Resolution Requirement

Regspersoon van die Kleinbosch Deeltitel Skema v Westraad N.O and Another (4580/2005)

Regspersoon van die Kleinbosch Deeltitel Skema v Westraad N.O and Another (4580/2005) [2006] ZAFSHC 107 (2 February 2006)

Court

Free State High Court, Bloemfontein

Case number

4580/2005

Judge

C.H.G. van der Merwe

The court found that the applicant failed to comply with the statutory requirement that the proposed special resolution be specifically mentioned in the written notice of the meeting. The agenda and attached documentation did not clearly indicate that a decision to institute legal proceedings against the developer would be considered. As a result, the resolution purportedly passed on 4 October 2005 was invalid and of no effect. The application was dismissed on this basis, with costs awarded to the respondents, including the costs of two counsel.

Source excerpt

• Sectional Titles Act
• Special Resolution Requirement
• Occupancy Certificates
• Application Procedure