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[2016] ZASCA 63
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Nova Property Group Holdings v Cobbett (20815/2014) [2016] ZASCA 63; [2016] 3 All SA 32 (SCA); 2016 (4) SA 317 (SCA) (12 May 2016)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 20815/2014
In
the matter between:
NOVA
PROPERTY GROUP HOLDINGS LTD
FIRST
APPELLANT
FRONTIER
ASSET MANAGEMENT & INVESTMENTS
SECOND APPELLANT
CENTRO
PROPERTY GROUP (PTY) LTD
THIRD
RESPONDENT
and
JULIUS
PETER COBBETT
FIRST
RESPONDENT
MONEYWEB
(PTY) LTD
SECOND
RESPONDENT
and
MANDG
CENTRE FOR INVESTIGATIVE JOURNALISM NPC
AMICUS
CURIAE
Neutral
citation:
Nova
Property Group Holdings v Cobbett
(20815/2014)
[2016] ZASCA 63
(12 May 2016)
Coram:
Maya
AP, Majiedt, Mbha JJA, Plasket and Kathree-Setiloane AJJA
Heard:
1
March 2016
Delivered:
12
May 2016
Summary:
Appealability
– interlocutory application – appealable under
s 17(1)
of
the
Superior Courts Act 10 of 2013
.
Company
law – interpretation of
s 26(2)
of the
Companies Act 71
of 2008
– provides an unqualified right of access to a
company’s securities register – person’s motive for
access
not relevant – right of access not subject to the
provisions of the Promotion of Access to Information Act 2 of 2000
(PAIA).
Rule
35 (14) – appellants failed to demonstrate that the documents
sought are relevant to a reasonably anticipated issue in
the main
application.
ORDER
On
appeal from
:
Gauteng
Division of the High Court, Pretoria (Tuchten J sitting as court of
first instance):
The
appeal is dismissed with costs including the costs of two counsel.
JUDGMENT
Kathree-Setiloane
AJA (Maya AP, Majiedt and Mbha JJA and Plasket AJA concurring):
[1]
This appeal arises from the attempts of Moneyweb (Pty) Ltd (Moneyweb)
and Mr JP Cobbett (Cobbett) to exercise their statutory
right in
terms of s 26 of the Companies Act 71 of 2008 (the
Companies Act) to
access the securities registers of the appellants, Nova Property
Group Holdings Limited (Nova), Frontier Asset Management &
Investments (Pty) Limited (Frontier), and Centro Property Group (Pty)
Limited (Centro). The appellants will be referred to collectively
as
‘the Companies’.
[2]
Cobbett is a financial journalist who specialises in the
investigation of illegal investment schemes. Moneyweb is a publisher
of business, financial and investment news. As part of its on-going
investigation into, and coverage of Sharemax Group of Companies’
controversial property syndication investment scheme (Sharemax
syndication scheme), Moneyweb commissioned Cobbett to investigate
the
shareholding structures of the Companies, which are purportedly
linked (directly or indirectly) to the Sharemax syndication
scheme,
and to write articles on his findings for publication by Moneyweb.
[3]
On 24 July 2013, Cobbett sent requests to the Companies for access to
their securities registers and to make copies thereof,
in terms of
s
26(2)
of the
Companies Act. He
delivered a request for access to
information in the form required by the Companies Regulations, 2011,
for this purpose.
[1]
Section 26(2)
entitles a person who does not hold a beneficial interest in any
securities issued by a profit company, or who is
not a member of a
non-profit company, to inspect or copy the securities register of a
profit company, or the members register of
a non-profit company that
has members, or the register of directors of a company, upon payment
of an amount not exceeding the prescribed
maximum fee for any such
inspection. When Cobbett’s requests were met with refusals,
Moneyweb launched an application, in
the Gauteng Division of the High
Court, Pretoria (the court a quo), to compel the Companies to provide
access to it for inspection
and making copies of the securities
registers within five days of the date of the order (the main
application).
[4]
Almost two years after the requests were made, Moneyweb has still
been unable to access the securities registers. Nor is it
even close
to doing so, as the Companies have not filed an answering affidavit
to the main application. Instead, the Companies
issued notices, in
terms of rule 35(12) and rules 35(11) to (14) of the Uniform Rules of
Court, in which they sought documents
referred to in Moneyweb’s
founding affidavit and copies of different sets of documents from
Moneyweb. Dissatisfied with Moneyweb’s
responses to their rule
35(12) and rules 35(11) to (14) notices, the Companies launched an
application to compel compliance therewith
(the interlocutory
application). The interlocutory application reveals that the
Companies ostensibly sought these documents for
purposes of
interrogating the ‘real motives’ of Moneyweb, as they
believed that Moneyweb was acting in furtherance
of a ‘sinister
agenda’ directed against Nova and its subsidiaries, including
certain members of its executive, and
that Moneyweb had embarked upon
a vendetta for the sole purpose of discrediting the Companies and
undermining their integrity.
The Companies contend that the documents
sought will enable them to prove that Moneyweb intends publishing
articles in the media
not for any journalistic motive, but rather in
furtherance of the ‘sinister agenda’ referred to above.
They assert,
in this regard, that the documents sought are relevant
to the anticipated issues in the main application, as they will
provide
them with a defence to that application.
[5]
In the court a quo, Tuchten J granted the Companies’ rule
35(12) application to compel discovery of documents referred
to in
Moneyweb’s founding affidavit, but dismissed their rule 35(14)
application to compel and made the following order:
‘
1
The [appellants] are directed within 20 days of the date of this
order to produce, in hardcopy format, the documents
listed in
paragraphs 1 to 10 of the respondents’ notice in terms of rule
35(12) dated 15 November 2013 for their inspection
and to permit them
to make copies or transcriptions thereof.
2
For the rest,
the application is dismissed.
3
The costs of
this application will be costs in the cause of the main application
to which these proceedings are interlocutory.’
[6]
Although the court a quo had not decided the main application, it
nevertheless pronounced on the proper interpretation of
s 26(2)
of
the
Companies Act, in
deciding whether to grant the interlocutory
relief to the Companies. It considered two of its conflicting
decisions
[2]
on the subject, and
concluded that
s 26(2)
did not confer an absolute right to inspection
of the documents contemplated in the subsection, but that the court
retained a discretion
to refuse to order inspection. In arriving at
this conclusion, the court below reasoned as follows:
‘
I
think that the construction advanced on behalf of [Moneyweb] gives
rise both to a potential for injustice and absurdities. Counsel
for
[Moneyweb] submitted, in answer to questions from the bench, that
even if the evidence proved that the purpose of the request
was to
identify the home of one of the persons whose particulars were on the
register so that an assassin would know where to find
and murder that
person, the court was bound to order disclosure. That outcome would,
I think, be unjust.
Section 26(9)
makes it an offence to fail to
accommodate any reasonable request for access, or unreasonably to
refuse access to a register. If
[Moneyweb’s] construction is
correct, a respondent who reasonably refused access but was
nevertheless ordered to provide
access would be liable to punishment
for contempt of court for a failure to comply with the order even
though he would be acquitted
of the criminal offence of failing to
provide access created by
s 26(9).
That outcome would, I think, be
absurd.
In
my view, a construction which confers a discretion on the court would
more effectively promote the objects and spirit of the
Constitution.
The rights which the parties assert and seek to protect are . . .
constitutional rights . . . rights to information
on the one hand and
privacy and dignity on the other. No constitutional right is
absolute. In the process of determining which
of the competing
constitutional rights should prevail, each such right must be weighed
against other relevant constitutional rights.
A construction which
would disable a court from weighing and giving effect to other
constitutional rights would be subversive of
the principle of
fairness underlying the constitution.’
The
Companies appeal against paragraphs 2 and 3 of the order set out
above. The appeal is with leave of the court a quo.
[7]
The issues in this appeal are two-fold. In view of the interlocutory
nature of the order of the court a quo, the first issue
that arises
for determination is whether it is appealable. If found to be so,
then the second issue which arises is whether the
documents sought by
the Companies in terms of rule 35(14) are relevant to a reasonably
anticipated issue in the main application.
This issue concerns the
proper interpretation of
s 26(2)
of the
Companies Act and
, in
particular, whether it confers an unqualified right of access to the
securities register of a company contemplated in the section.
Is
the order appealable?
[8]
On the test articulated by this court in
Zweni
v Minister of Law and Order,
[3]
the dismissal of an
application to compel discovery, such as by the court a quo, is not
appealable as it is (a) not final in effect
and is open to alteration
by the court below; (b) not definitive of the rights of the parties;
and (c) does not have the effect
of disposing of a substantial
portion of the relief claimed. However, three years later in
Moch
v Nedtravel (Pty) Ltd t/a American Express Travel Service,
[4]
this court held
that the requirements for appealability laid down in
Zweni
‘
. .
.[d]o not purport to be exhaustive or to cast the relevant
principles in stone’. Almost a decade later, in
Philani-Ma-Afrika
v Mailula,
[5]
this court
considered whether an execution order (which put an eviction order
into operation pending an appeal) was appealable.
It held the
execution order to be appealable, by adapting ‘the general
principles on the appealability of interim orders
. . . to accord
with the equitable and more context-sensitive standard of the
interests of justice favoured by our Constitution’.
[6]
In so doing, it
found the ‘interests of justice’ to be a paramount
consideration in deciding whether a judgment is appealable.
[7]
[9]
It is well established that in deciding what is in the interests of
justice, each case has to be considered in light of its
own facts.
[8]
The considerations
that serve the interests of justice, such as that the appeal will
traverse matters of significant importance
which pit the rights of
privacy and dignity on the one hand, against those of access to
information and freedom of expression on
the other hand, certainly
loom large before us. However, the most compelling, in my view, is
that a consideration of the merits
of the appeal will necessarily
involve a resolution of the seemingly conflicting decisions in
La
Lucia Sands Share Block Ltd & others v Barkhan & others
[9]
and
Bayoglu
[10]
on the one hand,
and
Basson
v On-Point Engineers (Pty) Ltd
[11]
and
M
& G Centre for Investigative Journalism NPC v CSR-E Loco
Supply
[12]
on the other.
[10]
Section 17(1) of the Superior Courts Act 10 of 2013 (the
Superior
Courts Act), which
provides for the circumstances in which a judge
may grant leave to appeal, gives express recognition to this
consideration. It
provides:
‘
(1)
Leave to appeal may only be given where the judge or judges concerned
are of the opinion that –
(
a
)
(i) the appeal would have a reasonable prospect of success; or
(ii)
there is some other compelling reason why the appeal should be heard,
including conflicting judgments on the matter
under consideration;
(
b
)
the decision sought on appeal does not fall within the ambit of
section 16(2)
(a)
; and
(
c
)
where the decision sought to be appealed does not dispose of all the
issues in the case,
the appeal would lead to a just and prompt
resolution of the real issues between the parties.’
The
provisions of
s 17(1)
of the
Superior Courts Act are
tailor-made for
this appeal principally for two reasons. First, as already alluded
to, there are at least four conflicting judgments,
including that of
the court a quo, on the proper interpretation of
s 26(2)
of the
Companies Act. Second
, the appeal would lead to a just and prompt
resolution of the real issues between the parties for the reasons set
out below.
[11]
Rule 35(14)
provides that a party may, for purposes of pleading,
require any other party to make available for inspection, within five
days,
a clearly specified document or tape-recording in his
possession ‘which is relevant to a reasonably anticipated issue
in
the action’, and to allow a copy or transcription to be made
of it. In the context of this appeal, the Companies are required
to
demonstrate that the documents are relevant to a tenable ground of
opposition to the main application. Since the Companies seek
to
compel discovery for the purpose of interrogating the ‘real
motives’ of Moneyweb for requesting access to their
securities
registers, in terms of
s 26
of the
Companies Act, the
question of the
‘relevance’ of the documents sought would be integral to
the interpretation of
s 26(2)
of the
Companies Act. It
is important
to bear in mind, in this respect, that although the court a quo did
not decide the main application, it did pronounce
on the proper
interpretation of
s 26(2)
of the
Companies Act in
deciding whether to
grant the interlocutory relief sought by the Companies. Before us,
therefore, the parties in essence accepted
that if the court
construes
s 26(2)
of the
Companies Act to
confer an unqualified right
of access to the securities register of a company, then Moneyweb’s
‘motives’ for
requesting access to the registers would be
irrelevant to the main application, and it would be entitled to an
order compelling
compliance with
s 26(2)
of the
Companies Act,
thereby
resolving the ‘real issue’ in the main
application, as envisaged in
s17(
1)
(c)
of
the
Superior Courts Act. On
this basis, therefore, Moneyweb was
constrained to concede that the judgment of the court below, although
not appealable under
the traditional
Zweni
test for interlocutory applications to compel discovery,
would be appealable under
s 17(1)
of the
Superior Courts Act.
Application
to adduce evidence
[12]
Before I proceed to deal with the real issue, being the
interpretation of
s 26(2)
of the
Companies Act, I
shall briefly deal
with the application by the Mail & Guardian Centre for
Investigative Journalism NPC (better known as amaBhungane)
for leave
to adduce evidence on appeal. AmaBhungane’s application to be
admitted as amicus curiae in this appeal, in terms
of
rule 16(4)
of
the rules of this court, was granted by the President of this court.
AmaBhungane is affiliated to the Mail & Guardian newspaper,
which
is the primary publisher of its work. It is dedicated to uncovering,
analyzing and reporting on information that the public
has a right to
know, such as evidence of corruption and abuse of power in both the
public and private sectors. Timely access to
the securities registers
of companies, which are implicated in such matters of public
interest, is essential to its task. Pursuant
to this objective,
amaBhungane made application, at the hearing of the appeal, for leave
to adduce evidence on: (a) its experience
with the Promotion of
Access to Information Act 2 of 2000 (PAIA) and the significance of
access to securities registers for the
work of investigative
journalists, and (b) the legislative history of
s 26(2)
of the
Companies Act for
the purposes of demonstrating that the present
formulation of
s 26(2)
is intended to confer an unqualified right of
access to securities registers of companies. The application was not
opposed and
the court granted amaBhungane leave to adduce evidence in
the terms sought. Since the rules of this court do not expressly
empower
it to receive evidence from an amicus curiae, I deal below
with the basis on which leave was granted to amaBhungane to adduce
evidence
on appeal.
[13]
This court is empowered under
s 19
(b)
of the
Superior Courts
Act to
receive further evidence. However,
rule 16(8)
of the rules of
this court provides that ‘a[n] amicus curiae shall be limited
to the record on appeal and may not add thereto
and, unless otherwise
ordered by the Court, shall not present oral argument’. This
position is, however, not invariable as
the court’s power to
regulate its own process in terms of s 173 of the Constitution may be
invoked to allow an amicus to
adduce further evidence, if to do so
would promote the interests of justice. Significantly, in this
regard, in
Children’s
Institute v Presiding Officer of the Children’s Court, District
of Krugersdorp & others
,
[13]
the Constitutional Court
held as follows (in relation to rule 16A of the Uniform rules):
‘
.
. . . In public interest matters, like the present case, allowing an
amicus to adduce evidence best promotes the spirit, purport
and
objects of the Bill of Rights. Therefore, the correct interpretation
of Rule 16A must be one that allows courts to consider
evidence from
amici where to do so would promote the interests of justice.’
The
Constitutional Court went on to hold that an amicus must, in
appropriate cases, be permitted to adduce evidence in the High
Court
for at least two reasons namely: (a) that rule 31 of the
Constitutional Court rules which permits it to admit evidence adduced
by an amicus curiae, supports the proposition that courts of first
instance must also be permitted to adduce evidence, because
it is
generally not in the interests of justice for the Constitutional
Court to sit as a court of first and final instance in relation
to
new issues and factual material;
[14]
and (b) that the
persuasive comment of an amicus will often draw on broader
considerations, and thus be premised on facts and evidence
not before
the court, including statistics and research. It would make little
sense to allow the presentation of bare submissions
unsupported by
facts.
[15]
[14]
The same rationale should, in my view, apply to this court as it
would be anomalous if an amicus could introduce evidence in
the High
Court and Constitutional Court, but not in this court. It follows,
therefore, that this court may, in appropriate circumstances,
permit
an amicus to adduce evidence, provided the requirements of
s 19(b)
of
the
Superior Courts Act are
met, namely that: (a) a sufficient
explanation is provided for why the evidence was not introduced
before the court a quo; (b)
there is a prima facie likelihood that
the evidence is true; and (c) the evidence is materially relevant to
the outcome.
[16]
These requirements
have been met in this appeal for the following reasons:
(a)
AmaBhungane could not adduce the evidence in the
court a quo because it was not party to those proceedings. It was,
furthermore,
not apparent that the court a quo would, in the
interlocutory proceedings consider, let alone pronounce on the proper
interpretation
of
s 26(2)
of the
Companies Act, which
arises for
determination in the main application.
(b)
The evidence which amaBhungane wishes to adduce on
appeal is true and not disputed by the parties. It is first-hand
evidence of
amaBhungane’s experience regarding the importance
of securities registers as a reliable tool in a journalist’s
artillery.
Additionally, the evidence relating to the prior versions
of the Companies Amendment Bill, 2010 (the Amendment Bill) is plainly
incontrovertible as these documents are official in nature.
(c)
The evidence of
amaBhungane’s experience with PAIA, and the significance of
access to securities registers for the work of
the media are plainly
relevant, and is precisely the kind of evidence that the
Constitutional Court has held may be introduced
by an amicus
curiae.
[17]
The practical
impact of a particular construction of legislation, in this case
s
26(2)
of the
Companies Act, is
a relevant question which generally
would need to be assessed from the evidence. Moreover, the evidence
of the evolving formulation
of the Amendment Bill in the
parliamentary process is an aid to interpretation and sheds light on
the intention of the legislature,
thus demonstrating why the
construction posited by the Companies could not have been intended by
the legislature. Thus, the evidence
is clearly relevant.
Interpretation
of
s 26(2)
of the
Companies Act
[15
]
I now turn to the question of the proper interpretation of
s 26(2)
of
the
Companies Act and
, in particular, whether it confers an
unqualified right of access to the securities register of a company.
The Companies contend
that
s 26(2)
confers a qualified right as
access may be refused, on the grounds set out in PAIA and on the
grounds of the ‘motive’
of the requester. On the
contrary, Moneyweb contends that an unqualified right is conferred on
any person who meets the procedural
requirements of
s 26(2)
of the
Companies Act. AmaBhungane
, in turn, contends that if access to
securities registers is subject to the grounds of refusal which apply
to a request under PAIA
or to a refusal based on the alleged motive
of the requester, then this will have a significant negative impact
on investigative
journalists and the public’s right to know.
[16]
The role that companies play in our society and their obligations of
disclosure that arise from the right of access to information
in s 32
of the Constitution, is central to the interpretation of
s
26(2)
of the
Companies Act. Both
this court and the Constitutional
Court have recognised that the manner in which companies operate and
conduct their affairs is
not a private matter. In
Bernstein
& others v Bester NO & others,
[18]
the Constitutional
Court made the position plain. The Court said:
‘
The
establishment of a company as a vehicle for conducting business on
the basis of limited liability is not a private matter. It
draws on a
legal framework endorsed by the community and operates through the
mobilisation of funds belonging to members of that
community. Any
person engaging in these activities should expect that the benefits
inherent in this creature of statute will have
concomitant
responsibilities. These include, amongst others, the statutory
obligations of proper disclosure and accountability
to shareholders.
It is clear that any information pertaining to participation in such
a public sphere cannot rightly be held to
be inhering in the person,
and it cannot consequently be said that in relation to such
information a reasonable expectation of
privacy exist. Nor would such
an expectation be recognised by society as objectively reasonable.
This applies also to the auditors
and debtors of the company. . . .’
[17]
This approach has been repeatedly endorsed. This passage in
Bernstein
was cited by this
court in
La
Lucia Sands
,
in dealing with s 113 of the Companies Act 61 of 1973 (the old
Companies Act), the predecessor to s 26 of the Companies Act.
[19]
Similarly, in his
separate concurring judgment in S v
Coetzee,
[20]
Kentridge AJ
emphasised that ‘those who choose to carry on their activities
through the medium of an artificial legal persona
must accept the
burdens as well as the privileges which go with their choice.’
Most recently, in
Company
Secretary of
Arcelormittal
South Africa & another v Vaal Environmental Justice Alliance
[21]
,
this court emphasized that ‘citizens in democracies around the
world are growing alert to the dangers of a culture of secrecy
and
unresponsiveness, both in respect of government and in relation to
corporations’ and that Parliament, driven by Constitutional
imperatives, had rightly seen fit to cater for this in its
legislation.
[18]
The Companies Act gives specific recognition to a culture of openness
and transparency in s 7 which lists the core objectives
of the Act.
Section 7
(b)
(iii), in particular, provides that a purpose of
the Act is to:
‘
.
. . [encourage] transparency and high standards of corporate
governance as appropriate, given the significant role of enterprises
within the social and economic life of the nation.’
Section
26 of the Companies Act is enacted with precisely these objectives in
mind. It recognizes that the establishment of a company
is not purely
a private matter and may impact the public in several ways. It
therefore seeks to impose strong rights of access
in respect of very
specific but ultimately limited types of information held by
companies. Section 26 must, therefore, be interpreted
in accordance
with this purpose. Section 26(1) confers a right of access to
information in respect of various kinds of information
to a person
who holds a beneficial interest in any securities issued by a profit
company, or who is a member of a non-profit company.
Section 26(2)
then confers a narrower and more specific right of access to all
others persons. It provides:
‘
A
person not contemplated in subsection (1) has a right to inspect or
copy the securities register of a profit company, or the members
register of a non-profit company that has members, or the register of
directors of a company, upon payment of an amount not exceeding
the
prescribed maximum fee for any such inspection.’
Interaction
between s 26(2) and PAIA
[19]
There are two aspects of s 26 that require particular emphasis: the
first concerns the interaction between s 26(2) and the
provisions of
PAIA and the second concerns the nature of the right conferred by s
26(2). In relation to the former, s 26 makes
clear that the right
conferred by s 26(2) is additional to the rights conferred by PAIA
and does not need to be exercised in accordance
with PAIA. In this
regard, s 26(7) provides:
‘
The
rights of access to information set out in this section are in
addition to, and not in substitution for, any rights a person
may
have to access information in terms of –
(a)
section 32 of the Constitution;
(b)
the Promotion of Access to Information Act, 2000
(Act 2 of 2000); or
(c)
any other public regulation.’
Markedly,
the approach of Parliament in conferring the right of access to
information in
s
26(2) of the Companies Act in addition to the rights conferred by
PAIA is consistent with s 39(3) of the Constitution which provides
that:
‘
The
Bill of Rights does not deny the existence of any other rights or
freedoms that are recognised or conferred by common law, customary
law or legislation, to the extent that they are consistent with the
Bill.’
[20]
In respect of the process to be followed in exercising the rights, s
26(4) provides:
‘
A
person may exercise the rights set out in subsection (1) or (2), or
contemplated in subsection (3)─
(a)
for a reasonable period during business hours;
(b)
by direct request made to a company in the
prescribed manner, either in person or through an attorney or other
personal representative
designated in writing;
or
(c)
in accordance with the Promotion of Access to
Information Act, 2000 (Act 2 of 2000).’ (own emphasis.)
What
is clear from s 26(4)
(c)
is
that procedurally PAIA is an alternative to requesting access to a
company’s share register in terms of the provisions
of s 26 of
the Companies Act.
[21]
The approach of Parliament, in this regard, was eminently sensible.
PAIA is a general statute. It regulates access to innumerable
types
of information held by a wide range of bodies, with various different
types of interests at stake. Parliament, therefore,
had to lay down
general rules to balance the competing interests at stake by means of
threshold requirements, grounds of refusal
and public interest
overrides. By contrast, s 26(2) confers a specific right in respect
of one type of information only −
securities registers and
directors registers. Parliament justifiably took the view that, in
respect of this narrow category of
information, it was unnecessary to
build in the PAIA balances and counter balances with all the
complexity and delay that might
entail. Instead, it conferred an
unqualified right that is capable of prompt vindication.
[22]
Notwithstanding this, and the clear wording of s 26(4) and s 26(7) of
the Companies Act, the Companies place considerable reliance
on PAIA
contending that they are entitled to argue, in the main application,
that the refusal of access to Moneyweb ‘is justified
on the
basis of the provisions of s 68(1) of PAIA.’ In terms of s
68(1) of PAIA, access to a record of a company may be refused
if the
record:
(a)
contains trade secrets of the
company;
(b)
contains financial, commercial,
scientific or technical information, other than trade secrets, of the
company, the disclosure of
which would be likely to cause harm to the
commercial or financial interests of the company;
(c)
contains information, the disclosure of which could
reasonably be expected; will put the company at a disadvantage in
contractual
and other negotiations; or will prejudice the company in
commercial competition.
Securities
registers quite clearly do not contain information of the nature
contemplated in s 68(1) of PAIA, and access cannot possibly
be
refused by the Companies on that basis. Furthermore, the Companies
contend that the right of access in s 26(2) must be qualified
by, and
subject to, the provisions of PAIA, and that the person requesting
the information must demonstrate that the information
is required for
the purpose of exercising or protecting a right. It is not clear how
this requirement can be imported into s 26(2)
without doing violence
to a right which is expressly intended by the legislature to be
unqualified. Moreover, the Companies fail
to explain how this
reliance on PAIA can be sustained in light of the clear language of
subsecs 26(4) and 26(7). Accordingly, the
Companies’ reliance
on PAIA is unsustainable as it certainly does not render the
documents sought in the rule 35(14) interlocutory
application
relevant to the main application.
[23]
In choosing to confer an unqualified right capable of prompt and easy
vindication in s 26(2) of the Companies Act, Parliament
would have
been alive to the fact that the procedures of PAIA can readily be
used as an instrument to frustrate and delay access
to records.
One
of the threshold requirements for a requester to obtain access to
information held by a private entity under s 50(1)(
a)
of PAIA is that the requester must prove
that that information requested is necessary for the ‘exercise
or protection
of any rights’. Even if this test is overcome,
there is potential for a ground of refusal to be claimed by the
company concerned.
For instance, in terms of s 71(1) of PAIA,
the private body ‘must’, if the record requested might
contain certain
information concerning a third party, take all
reasonable steps to inform the third party of the request. The
private body may
take up to 21 days to give this notice and the third
party may take a further 21 days to make representations, before the
private
body decides whether to grant or refuse access to the
requester. If access is granted, the third party may approach a court
to
prevent disclosure. If refused, the requester would have to make
application to court to compel disclosure. Given the potentially
hundreds of holders of securities, a decision by a company to invoke
the third party procedure in PAIA will effectively put the
securities
registers out of the reach of the requester indefinitely, and
certainly far beyond the natural life cycle of a relevant
journalistic investigation.
[24]
The point is illustrated by
President
of the Republic of South Africa v M & G Media Ltd
.
[22]
Even without any
proper basis for withholding access to the record, access was delayed
for six years. This was also amaBhungane’s
experience in
CSR-E
Loco
.
[23]
The present
proceedings speak for themselves – some three years later
Moneyweb is still nowhere near accessing the Companies’
securities registers. This demonstrates that PAIA will not provide
journalists prompt access to securities registers − for
whom
timely access is essential. Thus, if the PAIA limitations apply to s
26(2) requests, the inconvenience and cost of an application
to court
to challenge a refusal on those grounds will greatly inhibit access
to securities registers. Given the significant expenses
involved in
the court process, it will in most cases lead to important
investigations being aborted rather than an application
to court
being pursued.
[24]
One wonders why
subsecs 26(4)
(a)
and
(b)
were enacted if
they are capable of being impliedly trumped by PAIA.
[25]
What remains then is to set right the unfortunate obiter dictum of
this court in
La
Lucia Sands
vis-a-vis
the application of PAIA to a request for access under s 26 of the
Companies Act:
[25]
‘
[17]
For completeness, I record that the New
Companies Act 71 of 2008
has
been assented to but has not yet come into operation. Section 113 of
the Act has not been repeated in the new legislation.
Section 26 of
the new Act is entitled ‘‘Access to company records’’.
Section 26(3) provides that ‘’any
member’’
and “any other person’’ are entitled to inspect the
register of members during business
hours. Section 26(4) provides:
“
The
rights of access to information set out in this section are in
addition to, and not in substitution for, any rights a person
may
have to access information in terms of –
(a)
section 32 of the Constitution
(b)
the Promotion of Access to
Information Act, 2000 (Act No. 2 of 2000; or
(c)
any other public regulation.
[18]
It appears that in future the provisions of the
Promotion of
Access to Information Act 2 of 2000
will have to be employed by
non-members seeking access to the register of members. The rationale
set out above for obtaining information
contained in the register of
members will probably continue to apply, notwithstanding that the
request for information will now
have to be made in terms of the Act.
Happily, it is not an issue we need to address comprehensively or
at all. Section 113 applies to the present matter.’ (own
emphasis.)
This
obiter dictum is regrettable, as
s 26(7)
of the
Companies Act
expressly
states that the right conferred by
s 26(2)
is additional to
the rights conferred by PAIA. There is, in addition, no requirement
in
s 26
of the
Companies Act that
a request for access to a company’s
securities register must only be exercised in accordance with PAIA.
The obiter dictum
of this court in
La
Lucia Sands
is, therefore, clearly
wrong, and the Companies’ reliance on it is simply misplaced.
The
nature of the right
[26]
The second aspect of
s 26(2)
of the
Companies Act that
requires
emphasis is the nature of the right conferred by it in the context of
s 26
as a whole. Unlike its predecessor,
s 113
of the old
Companies
Act, s
26(2) expressly confers a right of access in respect of the
securities registers.
Section 26(5)
then goes further and provides
expressly, and in unqualified terms, that where a company receives a
request in the prescribed form,
the company ‘must within 14
business days comply with the request’. There is nothing in
subsecs 26(2) and 26(5) which,
in any way, qualifies this right. Nor
is there any reference in these sections to the reasonableness of
either the request or the
response. The only sub-section which
mentions reasonableness is
s 26(9)
, which creates the criminal
prohibition. It provides:
‘
It
is an offence for a company to─
(a
)
fail to accommodate any reasonable request for access, or to
unreasonably refuse access, to any record that a person has a right
to inspect or copy in terms of this section or
section 31
; or
(
b
)
to otherwise impede, interfere with, or attempt to frustrate, the
reasonable exercise by any person of the rights
set out in this
section or
section 31.
’
A
reasonable request in my view, would be one which is made in
accordance with the provisions of
s 26(4)
(a)
and
(b)
of the
Companies Act.
[27
]
The decision to include the reasonableness defence in
s 26(9)
is
perfectly understandable, as the legislature was presumably anxious
to avoid creating a strict liability offence, possibly because
of the
constitutional difficulties that this might have raised. However,
what the Companies seek to do is import the
s 26(9)
reasonableness
qualification back into
s 26(2)
to limit the right it confers. There
is no warrant for this. If Parliament had wanted to limit the
s 26(2)
right, it would have done so expressly. Instead, it enacted an
unqualified right in
s 26(2)
read with
s 26(4)
and introduced a
reasonableness qualification only in respect of the criminal offence
created by
s 26(9).
[28]
The failure to introduce an equivalent qualification of
reasonableness in
s 26(2)
and
26
(4) makes clear that outside of the
criminal offence created, there is no similar restriction.
Section
26(2)
clearly confers an unqualified right on members of the public
and the media to obtain access to share registers. This means that
the ‘motive’ with which the person seeks access to the
information concerned is irrelevant. This construction of
s 26(2)
is
completely consistent with its legislative history, as revealed by
the different versions of the Amendment Bill. The versions
of the
Amendment Bill prior to the adoption of the
Companies Act in
its
amended form show a deliberate journey from a formulation of
s 26(2)
in which the PAIA limitations were arguably applicable, to a
formulation which makes it clear that the PAIA limitations are not
applicable, and that the right of access is not qualified.
[29]
Notably,
s 113
of the old
Companies Act provided
an unqualified right
for any person to access a company’s share register that was
subject to a court’s discretion to
refuse access. When the
Minister of Trade and Industry tabled the Companies Bill, 2008, in
the National Assembly there was no express
access provisions for
non-shareholders. The proposed subsecs 26(2) and (5) appeared to
anticipate the possibility that non-shareholders
might gain access by
means of PAIA and that, given PAIA’s exemptions, there might be
reasonable grounds to deny access. AmaBhungane
was concerned about
the erosion of the unqualified right in
s 113
of the old
Companies
Act and
made submissions to the Portfolio Committee. When the
Companies Act was
finally enacted in 2008, it included
s 26(2)
which
gives any person the right of access, and it introduced a peremptory
element:
must . . . be open to
inspection’
in
s 26(6).
The
Companies Act made
it clear that this right was in addition to any
rights under PAIA.
[30]
The
Companies Act contained
errors, and the Minister therefore
introduced the Amendment Bill before the Act came into force. The
original version of the Amendment
Bill B40–2010 appeared to
make the right to access subject to PAIA, by using the conjunctive
‘and’. It also omitted
the peremptory wording ‘must’
that had been included in the
Companies Act. It
stated:
A
person may exercise the rights set out in subsection (1) or (2), or
contemplated in subsection (3)─
(a)
for a reasonable period during business hours;
(b)
by direct request made to a company in the prescribed manner, either
in person, or through an attorney or other personal representative
designated in writing;
and
(c)
in accordance with the Promotion of Access to Information Act, 2000
(Act No.2 of 2000).’ (own emphasis.)
Whilst
that version appears to suggest that the s 26 right would have been
qualified along the lines proposed by the Companies,
after receiving
public submissions (including amaBhungane’s), the Portfolio
Committee produced the revised version B40A−2010
of the
Amendment Bill. In Bill B40A−2010 the conjunctive ‘and’
in subsection (4) was replaced with the disjunctive
‘or’.
The effect was to make it plain that PAIA would be an alternative
mode of obtaining access to company records.
In addition, the
Portfolio Committee inserted a new sub-clause which made clear the
peremptory nature of the obligation imposed
on the company. It read:
‘
(5)
Where a company receives a request in terms of subsection (4)
(b)
it
must
within
14 business days comply with the request by providing the opportunity
to inspect or copy the register concerned to the person
making such
request.’ (own emphasis.)
These
two alterations, which made it clear that the right is unqualified,
were retained in the version of the Bill that ultimately
became the
Amendment Act.
[31]
The Companies Regulations demonstrate a similar evolution. Regulation
24(2) of the Draft Companies Regulations, published for
comment on 29
November 2010,
[26]
provided that a
person claiming a right of access to any record held by a company may
not exercise that right until ‘
[the
person’s] right of access to the information has been confirmed
in accordance with [PAIA]’.
[27]
Draft Regulation
24(4) provided that a person claiming access to any record held by a
company had to make a written request by delivering
to the company a
completed prescribed form as well as ‘any further documents or
other material required in terms of’
PAIA. The final
regulations
[28]
are, however,
consistent with the current formulation in the
Companies Act as
amended by the Amendment Act in 2011. They too now use the
disjunctive ‘or’ to distinguish between rights under PAIA
and the additional access rights created by s 26, and they too use
the peremptory form ‘must . . . accede to the request’.
[32]
The legislative history squarely contradicts the construction of s
26(2) which is contended for by the Companies. It demonstrates
a
clear intention on the part of the legislature to provide that the
right under s 26(2) can be exercised independently of PAIA,
and that
a company cannot require disclosure of the reason for the request to
access the securities register of a company −
as the right is
unqualified.
[33]
Essentially, this means that the ‘motive’ with which a
requester seeks access to a company’s share register
is
irrelevant. In
La
Lucia Sands
this
court made clear that, under s 113 of the old
Companies Act, a
company could not require disclosure of the reason for the request to
access the shares registers. It said:
[29]
‘
Section
113 of the Act does not oblige a person requesting information to
provide motivation for doing so. It has been held that
a person who
seeks to inspect the register need not give reasons for doing so.
(See
Holland
v Dickson
(1888)
37 Ch.D. 669
at 671-672 and
Labatt
Brewing Co Ltd v Trilon Holdings Inc
41
O.R. (3d) 384 para 6. Meskin et al
Henochberg
on the
Companies Act
>
(above),
with reference to
Dickson
,
state the following:
“
But
in any event the company cannot require the disclosure of the reason
for the inspection as a condition precedent to allowing
it . . .”
[34]
Having said that, the court in
La
Lucia Sands
went
on to hold that, under
s 113
of the old
Companies Act, a
court
had a discretion to decline to make an order requiring access where
it is shown that the information is sought for some unlawful
purpose.
In reaching this conclusion, it relied on the decision of the English
court of appeal in
Pelling
v Families Need Fathers Ltd,
[30]
where its reasoning
was based almost exclusively on the fact that the old English
Companies Act 1985 provided that the Registrar
hearing the matter
“
may”
make an order
compelling access. The court explained it as follows:
[31]
‘
On
the true construction of s 356(6) the registrar had a discretion to
refuse the order. In its ordinary and natural meaning the
word “may”
is apt to confer a discretion or power . . . The use of “may”
in subsection (6)
is in striking contrast to the mandatory
force of “shall” in other parts of the same section, such
as sub-s (3). .
. .
‘‘
[w]hether
the power will be exercised must depend upon the proper discretionary
considerations affecting the power in the light
of the facts as are
found by the court.’’
[32]
We
agree. For those reasons we reject the absolutist construction
proposed by Dr Pelling.’
[35]
Section 113(4) of the old Companies Act was in very similar terms to
the old English Companies Act 1985. It provided that ‘in
the
case of any such refusal or default the court may, on application, by
order compel an immediate inspection of the register’.
It is,
therefore, not surprising that this court in
La
Lucia Sands
took
the same approach as the court in
Pelling
.
However, s 26 of the Companies Act is different. Unlike s 113 of the
old Companies Act, it does not contain a provision dealing
specifically with an application to court to compel compliance and,
in particular, contains no provision rendering the decision
of the
court discretionary on this basis. Parliament, which is presumed to
know the law,
[33]
chose not to enact
a provision equivalent to s 113(4), and instead strengthened the
access provision by making clear in s 26(2)
that it conferred a
‘right’ of access, without qualification and not subject
to a discretionary override.
[36]
This means that when a company fails or refuses to provide access,
that person is entitled, as of right, to an order compelling
access.
The question of the motive or purpose is simply irrelevant. The
Companies have, therefore, failed to demonstrate that the
documents
sought in the rule 35(14) notice ‘are relevant to a reasonably
anticipated issue in the main application.’
The Companies’
belief in relation to what they will purportedly achieve through
access to those documents, does not give
rise to a defence to the
main application as Moneyweb’s ‘motive’ for seeking
access to the Companies’ securities
registers is simply
irrelevant.
[37]
The Companies’ construction of s 26(2) would have a negative
impact on openness and transparency, and would directly
undermine the
work of Moneyweb, amaBhungane and other investigative journalists, as
it limits the right to freedom of expression.
The Constitutional
Court has emphasised in
Brümmer
v Minister for Social Development & others
[34]
that media have a
duty to report accurately, as ‘[t]he consequence of inaccurate
reporting would be devastating.’ This
then means that the
journalists must be able to have speedy access to information such as
the securities registers: ‘Access
to information is crucial to
accurate reporting and thus to imparting accurate information to the
public.’
[35]
Interference with
the ability to access information impedes the freedom of the press.
The right to freedom of expression is not
limited to the right to
speak, but includes the right to receive information and ideas.
[36]
Preventing the
press from reporting fully and accurately, does not only violate the
rights of the journalist, but it also violates
the rights of all the
people who rely on the media to provide them with ‘
information
and ideas.’
[38]
An unqualified right of access to a company’s securities
register is, therefore, essential for effective journalism and
an
informed citizenry. AmaBhungane has provided the court with examples
of investigations and news reports, where access to share
register
information was central to its investigation. One such news report
relates to a tender award by a parastatal,
[37]
where immediate
access to share registers enabled journalists to uncover an apparent
conflict of interests in relation to the head
of a tender committee.
Investigations like this, would likely not have been possible if
journalists did not have an unqualified
right of access to securities
registers of companies under s 26(2) of the Companies Act.
[39]
In a final attempt at salvaging its case, the Companies contend that
an unqualified right of access to a company’s securities
register would constitute a violation of a shareholder’s right
to privacy in terms of s 14 of the Constitution, and that
the rights
of access to information and freedom of expression must be weighed
against this right − as no right is absolute.
The Companies
contend that information contained in a private company’s
securities register is information of a personal
nature as it will
contain names and identities of individuals; their home and work
addresses. In addition, they contend that depending
on the nature of
the company, it may also expose their business affiliations, how
wealthy they are and what their political, moral
and religious
leanings are. The contention thus advanced is that a company’s
securities register contains information of
a sensitive nature that
may reveal deeply private matters about shareholders in a particular
company which, in the hands of the
wrong people, may be open to
abuse.
[40]
I disagree. First, because the Companies do not challenge the
constitutionality of s 26(2) of the Companies Act on the grounds
of a
violation of the right to privacy, and secondly, because the privacy
and dignity rights of shareholders are minimally implicated
in the
right of access conferred by s 26(2). It is a narrow right of access
that is limited to securities registers and directors
registers of
companies contemplated in the section. Regulation 32 (2) of the
Companies Regulations provides that:
‘
In
addition to the information otherwise required, the company's
securities register must also include in respect of each person
to
whom the company has issued securities, or to whom securities of the
company have been transferred-
(a)
the person's─
(i)
name and business, residential or postal address, as required by
section 50(2)(b)(i);
and
(ii)
the person's email address if available, unless the person has
declined to provide
an email address;
(b)
an identifying number that is unique to that person.’
Regulation
32(6), in turn, provides that:
‘
In
so far as the identity number and e-mail address of a person may be
entered into a register kept under this regulation, such
information
may, at the instance of the company, Central Securities Depository or
relevant Participant as the case may be, be regarded
as
confidential.’
[41]
A shareholder in a company is, therefore, only required to provide
his or her name, business, residential or postal address,
an e-mail
address if he or she elects to do so, and an identifying number that
is unique to that person. Where the shareholder’s
identity
number and e-mail address are entered into a securities register, it
may be regarded as confidential at the instance of
the company or the
shareholder. Thus, in view of the limited nature of the personal
information of a shareholder that must be included
in a securities
register, and the regulatory safeguards aimed at ensuring
confidentiality and non-disclosure of such information,
there can be
no room for abuse. It is against this backdrop that a potential
violation of the privacy rights of shareholders and
companies should
be considered.
[42]
In conferring an unqualified ‘right’ of access to a
company’s securities register in s 26(2) of the Companies
Act,
the legislature has chosen to prioritize the right of access to
information over the privacy rights of shareholders and companies.
In
the absence of an express limitation of that right by the
legislature, it is not for the court to limit it because of some
nebulous spectre of abuse, particularly where as in this context,
there are built-in safeguards against the disclosure of confidential
information − and the constitutionality of the provision is not
challenged. The scope of the right to privacy of shareholders
must,
therefore, be viewed in its proper context. In
Gaertner
& others v Minister of Finance & others
,
the Constitutional Court held:
[38]
‘
Privacy,
like other rights, is not absolute. As a person moves into communal
relations and activities such as business and social
interaction, the
scope of personal space shrinks. This diminished personal space does
not mean that, once people are involved in
social interactions or
business, they no longer have a right to privacy. What it means is
that the right is attenuated, not obliterated.
And the attenuation is
more or less, depending on how far and into what one has strayed from
the inner sanctum of the home.’
Accordingly,
the court a quo erred in its obiter finding quoted in paragraph 6
above.
Prior
Restraint
[43]
In light of the irrelevance of Moneyweb’s ‘motive’
in seeking access to the Companies’ securities registers,
the
case of the Companies on appeal amounts to little more than that they
are deeply aggrieved about the manner in which Moneyweb
has reported
on them. The Companies fear that Moneyweb will use access to the
securities registers for further ‘negative
reporting’ and
this will cause them harm. The Companies are, in this respect, little
different from any person or entity
who is subject to negative press
coverage. They are unhappy about it and wish to curtail, impede and
prevent it. But, whatever
other remedies are open to the Companies,
these concerns cannot provide a basis for limiting Moneyweb’s
exercise of its s
26(2) statutory rights in respect of the securities
registers concerned. The media cannot be precluded from accessing
information
because the subject of the likely reportage considers
that the reportage will be unfavourable and unfair. Indeed, such a
proposition
is inconsistent with two well established principles laid
down by this court. The first is the principle established in
City
of Cape Town v South African National Roads Authority Limited
,
that access to accurate information is critical for the right to
freedom of expression, which this court expressed as follows:
‘
The
right to freedom of expression lies at the heart of democracy, and is
one of a “web of mutually supporting rights”
that hold up
the fabric of the constitutional order. Section 32(1) of the
Constitution guarantees everyone the “right of
access to
information held by the state”. Citizens and public interest
groupings rely on this right to uncover wrongdoing
on the part of
public officials or for accessing information to report on matters of
public importance. The Constitutional Court
has noted that the media
has a duty to report accurately, because the “consequences of
inaccurate reporting may be devastating.”
It goes without
saying that to report accurately the media must have access to
information. Access to information is “crucial
to accurate
reporting and thus to imparting information to the public.”
While s 32 of the Constitution guarantees the right
of persons to
access relevant information, s 16 entitles them to distribute that
information to others.’
[39]
(footnotes
omitted.)
[44]
The approach urged by the Companies would, to my mind, preclude such
accurate reporting. It would require Moneyweb to attempt
to report on
the shareholding of the Companies without having access to the
information that definitively and accurately sets out
those details.
Quite apart from the potential negative effect that this would have
on the Companies, this would undermine the right
of the public to
receive accurate information via the media. There is simply no basis
for this approach.
[45]
The second principle is that courts will only rarely make orders
which amount to prior restraints on expression. This principle
was
established in
Midi
Television (Pty) Ltd t/a E-TV v DPP (WC),
[40]
where
this court held:
‘
In
summary, a publication will be unlawful, thus susceptible to being
prohibited, only if the prejudice that the publication might
cause to
the administration of justice is demonstrable and substantial and
there is a real risk that the prejudice will occur if
publication
takes place. Mere conjecture or speculation that prejudice might
occur will not be enough. Even then publication will
not be unlawful
unless a court is satisfied that the disadvantage of curtailing the
free flow of information outweighs its advantage.
In making that
evaluation it is not only the interests of those who are associated
with the publication that need to be brought
to account but, more
important, the interest of every person in having access to
information. Applying the ordinary principles
that come into play
when a final interdict is sought, if a risk of that kind is clearly
established, and it cannot be prevented
from occurring by other
means, a ban on publication that is confined in scope and in content
and in duration to what is necessary
to avoid the risk might be
considered.
Those
principles would seem to me to be applicable whenever a court is
asked to restrict the exercise of press freedom for the protection
of
the administration of justice, whether by a ban on publication or
otherwise. They would also seem to me to apply, with appropriate
adaptation, whenever the exercise of press freedom is sought to be
restricted in protection of another right. . . .’
[46]
Although the interlocutory application does not involve the granting
of an interdict against the media, the effect is much
the same. The
deponent to the Companies’ founding affidavit makes plain that
they are, in fact, seeking to prevent Moneyweb
from reporting on
these issues at all. They seek to do this by precluding Moneyweb and
Cobbett from ever having access to their
securities registers for
purposes of their reporting. In other words, rather than interdict
the Moneyweb publication, the Companies
seek to stop it at the
investigation stage. There is simply no basis for such an order. If
publication occurs and if it is unlawful,
the Companies will be
entitled to sue for damages, which will ‘usually [be] capable
of vindicating the right to reputation.’
[41]
The Companies
cannot, however, in advance enlist the assistance of the court to
prevent Moneyweb from engaging in the investigations
concerned as
this will undoubtedly amount to prior restraint.
[47]
To sum up, s 26(2) of the Companies Act provides an unqualified right
of access to securities registers. If Parliament is of
the view that
the right should be qualified in some way, because of concerns
relating to abuse of the right of access, it can legislate
accordingly – but it has chosen not to do so. For instance,
under the old English Companies Act, 1985, anyone could obtain
access
to a company’s share register. However, there was evidence that
some people were abusing this right and seeking information
in order
to harass shareholders. So, since 2006, these rights have been
qualified in the English Companies Act, 2006, as the English
Parliament sought to provide some protection for members against
improper requests by enabling the company to obtain a court order
preventing access to the registers if the requester fails the proper
purpose test. Accordingly, in terms of s 116(4)(
c
)
and (
d
)
of the English Companies Act, 2006, a person who requests access to
the register of members is required to submit a formal request
setting out certain information that includes, inter alia, the
purpose for which the information is to be used and whether the
information will be disclosed to another person. Once the request has
been submitted to the company, it must, within five working
days,
either comply with the request or apply to court for an order that it
need not comply with the request.
[42]
The court may grant
an order if it is satisfied that the inspection or copy is not sought
for a ‘proper purpose.’
[43]
Notably, our
Parliament has chosen not to follow this route.
[48]
As things stand, Moneyweb’s ‘motive’ for seeking
access to the Companies’ securities registers is simply
irrelevant. They have, therefore, failed to demonstrate that the
documents sought in the rule 35(14) notice ‘are relevant
to a
reasonably anticipated issue in the main application’. For
these reasons, the appeal must be dismissed.
Costs
[49]
Moneyweb urges the court to direct the Companies to pay Moneyweb’s
costs on a punitive scale as their application to
compel discovery in
terms of rule 35(14) was and remains untenable, and the conduct of
the Companies, in that regard, has had the
effect of considerably
delaying Moneyweb proceeding with the main application and obtaining
access to the securities registers.
In addition, they urge the court
to make clear that conduct that delays or frustrates the exercise of
statutory and constitutional
rights is not acceptable.
[50]
Sight must not be lost of the fact that the Companies had obtained
partial relief in the court below. Curiously, the Judge
in the court
below found that although there was ‘a compelling case for
discovery’:
‘
I
have decided in the exercise of my discretion not to grant a
discovery order at this stage. My reasons for this decision are
purely practical. If a discovery order is granted, the affidavit
would become completely unwieldy.’
He
furthermore pronounced upon the interpretation of s 26(2) of the
Companies Act in a manner favourable to the Companies –
yet he
failed to grant their application to compel discovery in terms of
rule 35(14). The Companies were, in my view, justified
in appealing
the judgment of the court below. Accordingly, I incline against
granting costs against the Companies on a punitive
scale.
[51]
The following order is made:
The
appeal is dismissed with costs including the costs of two counsel.
_________________
F
Kathree-Setiloane
Acting
Judge of Appeal
APPEARANCES:
For
Appellants:
JJ Brett SC with D Mahon and K Hopkins
Instructed by:
Faber Goërtz
Ellis Austen Inc, Pretoria
McIntyre Van Der
Post, Bloemfontein
For
Respondent:
S Budlender with M Sikhakhane
Instructed by:
Willem De Klerk
Attorneys, Pretoria
Honey Attorneys,
Bloemfontein
For
Amicus Curie:
G Budlender SC
Instructed by:
Webber Wentzel
Attorneys, Johannesburg
Webbers Attorneys,
Bloemfontein
[1]
Regulation 24 of the Companies
Regulations, 2011 (Published under GN R351,
GG
34239, 26 April 2011 as amended by GN
R619,
GG
36759,
20 August 2013 and GN R82,
GG
37299, 5 February 2014) requires a
person claiming a right of access to a record held by a company to
make a request in writing
by delivering to the company a completed
request for access to information form (Form CoR24).
[2]
Bayoglu v Manngwe Mining (Pty) Ltd
2012 JDR 1902 (GNP) and
M&G
Centre for Investigative Journalism NPC v CSR-E Loco Supply (Pty)
Ltd
case number 23477/2013
(8 November 2013).
[3]
Zweni v Minister of Law and Order
[1992] ZASCA 197
;
1993 (1) SA 523
(A)
at 532J-533A.
[4]
Moch v Nedtravel (Pty) Ltd t/a
American Express Travel Service
[1996]
ZASCA 2
;
1996 (3) SA 1
(A) at 10E-G.
[5]
Philani-Ma-Afrika & others v
Mailula & others
[2009]
ZASCA 115
;
2010 (2) SA 573
(SCA). See also
S
v Western Areas Ltd & others
[2005]
ZASCA 31
;
2005 (5) SA 214
(SCA) paras 25-26;
Khumalo
& others v Holomisa
[2002]
ZACC 12
;
2002 (5) SA 401
(CC) para 8.
[6]
International Trade Administration
Commission v SCAW South Africa (Pty) Ltd
[2010]
ZACC 6
;
2012 (4) SA 618
(CC) para 53.
[7]
Philani-Ma-Afrika
para
20.
[8]
Member of the Executive Council
for Development Planning and Local Government, Gauteng v Democratic
Party & others
[1998]
ZACC 9
;
1998 (4) SA 1157
(CC) para 32.
[9]
La Lucia Sands Share Block
Ltd & others v Barkhan & others
[2010]
ZASCA 132; 2010 (6) SA 421 (SCA).
[10]
Footnote 2 above.
[11]
Basson v On-Point Engineers (Pty)
Ltd
& others
(64107/11) [2012] ZAGPPHC 251 (7
November 2012); 2012 JDR 2126 (GNP).
[12]
Footnote 2 above.
[13]
Children’s Institute v
Presiding Officer of the Children’s Court, District of
Krugersdorp & others
[2012]
ZACC 25
;
2013 (2) SA 620
(CC) para 27.
[14]
Children’s Institute
para 30.
[15]
Children’s Institute
para 31.
[16]
D E van Loggerenberg et al (eds)
Erasmus Superior Court Practice (November 2013 - Service Issue 43)
at A1-56. See also
Minister
of Justice and Constitutional Development & others v Southern
African Litigation Centre & others
[2016]
ZASCA 17
(15 March 2016) para 30.
[17]
Children’s Institute
paras 31 and 34.
[18]
Bernstein & others v Bester NO
& others
[1996] ZACC
2
;
1996 (2) SA 751
(CC) para 85.
[19]
La Lucia Sands
para
21.
[20]
S v Coetzee & others
[1997] ZACC 2
;
1997 (3) SA 527
(CC)
para 98.
[21]
Company Secretary of Arcelormittal
South Africa & another v Vaal Environmental Justice Alliance
[2014] ZASCA 184
;
2015 (1) SA 515
(SCA) para 1.
[22]
President of the Republic of South
Africa & others v M & G Media Ltd
[2014]
ZASCA 124
;
2015 (1) SA 92
(SCA). See also generally
MEC
for Roads and Public Works, Eastern Cape & another v Intertrade
Two (Pty) Ltd
[2006] ZASCA
33
;
2006 (5) SA 1
(SCA) para 20.
[23]
See footnote 2 above.
[24]
See
City
of Cape Town v South African National Roads Authority Limited &
others
[2015] ZASCA 58
;
2015 (3) SA 386
(SCA) para 43.
[25]
La Lucia Sands
paras
17-18.
[26]
Companies Regulations, GN R1664,
GG
32832
,
22 December 2009.
[27]
Clause 24(3)(b) of the draft
Regulations.
[28]
Companies Regulations, GN R351,
GG
34239
,
26 April 2011.
[29]
La Lucia Sands
at
para 10.
[30]
Pelling v Families Need Fathers
Ltd
[2001] EWCA Civ 1280
;
[2002] 2 All ER 440
(CA).
[31]
Pelling
para
23.
[32]
O’Brien v Sporting Shooters
Association of Australia (Victoria)
[1999]
3 VR 251
;
[1999] VSC 313
(20 August 1999) para 21.
[33]
Road Accident Fund v Monjane
[2007] ZASCA 57
;
2010 (3)
SA 641
(SCA) para 12.
[34]
Brümmer v Minister for Social
Development & others
[2009]
ZACC 21
;
2009 (6) SA 323
(CC) para 63.
[35]
Brümmer
para
63.
[36]
Section 16(1)
(b)
of the Constitution.
[37]
‘
Transnet tender boss’s
R50 billion double game’, Mail & Guardian, 4 July 2014.
[38]
Gaertner & others v Minister
of Finance & others
[2013]
ZACC 38
;
2014 (1) SA 442
(CC) para 49.
[39]
City of Cape Town v South African
National Roads Authority Limited & others
above,
para 20.
[40]
Midi Television (Pty) Ltd t/a E-TV
v Director of Public Prosecutions (Western Cape)
[2007]
ZASCA 56
;
2007 (5) SA 540
(SCA) paras 19-20.
[41]
Midi Television
para
20.
[42]
Section 117(1)(a)
and (b).
[43]
In re Burry & Knight Ltd
[2014] 1 WLR 4046.