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[2012] ZAGPPHC 251
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Basson v On-Point Engineers (Pty) Ltd and Others (64107/11) [2012] ZAGPPHC 251 (7 November 2012)
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC OF SOUTH AFRICA)
Case
Number: 64107/11
Date:07/11/2012
In
the matter between:
ADRIAAN
JURGENS
BASSON
..........................................................................
1
ST
APPLICANT
MEDIA
24
LIMITED
.................................................................................................
2
nd
APPLICANT
and
ON-POINT
ENGINEERS (PTY)
LTD
......................................................................
1
st
RESPONDENT
SL
ENGIEERING (PTY)
LTD
..................................................................................
2
nd
RESPONDENT
GWAMA
PROPERTIES
..........................................................................................
3
rd
RESPONDENT
JUDGMENT
Delivered
on: 07 November 2012
POTTERILL
J,
1.
On 15 June 2012 Bertelsmann J made the following order:
"1.
First, second and third respondents are called upon to show cause on
05 July 2012 at 10h00 am in this court (Bertelsmann,
J) why they
should not be directed to allow applicants or their duly authorized
representatives to inspect and make copies of the
original security
register of each of the three respondents within 5 days from date of
this order.
2.
This flows from the applicants applying for an order directing the
respondents to allow the applicants to inspect and make copies
of the
original register of members of each of the respondents within five
days of the order. The applicants also pray that the
respondents be
directed to pay the costs jointly and severally on an attorney and
client scale.
3.1
The first applicant is employed by the second applicant as the
Assistant Editor at the City Press newspaper. In the application
he
averred that he is: "duly authorized to depose to this affidavit
on behalf of the second respondent "[par1]
The respondent in
the opposing affidavit answered thereto in par 3.1 as follows:
"The
deponent to the founding affidavit in support of the application has
not provided any proof that he has been authorized
to institute
proceedings on behalf of the second applicant. There is no resolution
of the Second Respondent in this regard."
In
the replying affidavit the first applicant attached "RA1" a
copy of a resolution of the second respondent wherein the
first
applicant's authority to act on behalf of the second respondent is
confirmed.
3.2
On behalf of the respondents it was argued that the first applicant
did not have authority to act on behalf of the second applicant
and
that this as a point in limine should end the matter there. The
argument was that the authorization was obtained on 30 January
2012
whereas the application was already filed on 9 November 2011 clearly
indicating that at the time of launching the application
the
applicant lacked the necessary authority to act on behalf of the
second applicant.
3.3
The applicant's counsel pointed out that paragraph 2 of the
authorization ratified all steps "in the initiation and
prosecution
of the application which predates this authority".
Accordingly this point in limine is to be dismissed as even a
defective
authority at the time of launching an application can be
ratified ex post facto; National CO-op Dairies Ltd v Smith 1996(2) SA
717 (N) on p719 at D.
3.4
On the papers before me the first applicant can in any event act on
behalf of himself. As for him acting on behalf of the second
applicant his authorization was ratified ex post facto and the first
applicant was thus authorized to act on behalf of the second
applicant.
There
was a further argument on behalf of the respondents that the first
applicant deliberately misled the Court by averring in
the founding
affidavit that he was authorized to act on behalf of the second
applicant when he was not authorised to do so. The
court should frown
upon such an untruth and disregard the affidavit in support of the
notice of motion resulting in the dismissal
of the application.
There
is no basis set out in the opposing affidavit that the first
applicant without knowledge or authorization of the second applicant
proceeded to initiate the proceedings. There is no evidence to
suggest that the second applicant did not know of the application.
From
the wording of the authorization the second applicant knew that
affidavits were to be filed by the first applicant on behalf
of the
second applicant and all steps taken in the application which
predated the authority were to be ratified. This written ratification
is in essence a decision by the second applicant to proceed with the
application from which the only inference to be made is that
the
second applicant wanted to ratify whatever action was taken - Smith v
Kwanonqubela Town Council [1999] 4 ALL SA SCA 331 on334
[9]. This
point in limine is thus dismissed.
4.1
The second point in limine raised at the hearing for the first time
was that the affidavits in support of the notice of motion
did not
comply with the provisions of "section" 4(1) of the
Justices of the Peace and Commissioners of Oaths Act, Act
16 of 1963,
in that the full names of the Commissioner of Oaths was not printed,
did not state the designation, did not provide
a business address and
did not indicate the area for which the commissioner held office. I
was referred to NDPP v Hlongwe: In Re
NDPP v Nkosi
[2006] 2 ALL SA
486
(T) on 501 at [36] as support for the proposition that the
application must be dismissed because there is no affidavit before
the
court.
4.2
The applicant argued that as this point in limine was not raised on
the two previous occasions at court or in the opposing affidavit
the
applicant had no opportunity to seek condonation of the defect;
[Swart v Swart 1950(1) SA 263 (O)]. It was further submitted
that
this point must be dismissed because Regulation 4 was held to be
directory and there was substantial compliance with the regulation-
Dawood v Mohamed 1979(2) 361 [D and CLD].
4.3
The full bench of this division in S v Msibi 1974(4) SA 821 (T) found
that the compliance with regulation 4 is directory and
a court can
exercise its discretion in admitting such affidavit if there is
substantial compliance with the regulation. The Commissioner
did not
provide a business address and the area the Commissioner held office
and his/her designation. This is in fact a requirement
of Regulation
4(2) and not 4(1) as complained of. The stamp of the Commissioner
clearly indicated that the Commissioner was in
the South African
Police Services at the Management Information Centre Rosebank. I can
not express myself better than in the words
of Page AJ in the
Dawood-matter supra at p367C-E:
In
deciding whether the non-compliance is of such a nature that the
Court should refuse to entertain the affidavit it is clearly
relevant
to have regard to the nature and purpose of the requirement with
which there has been failure to comply. In the present
case it seems
to me that the reason for the requirement that the commissioner
should furnish his business address is to facilitate
the task of
anyone who might thereafter wish to locate him for any purpose
connected with the affidavit and its execution. In the
present case
the information supplied is sufficient to enable anyone of ordinary
intelligence to deduce that the business address
of the commissioner
of oaths is"., at the offices of the SAPS Rosebank Management
Information Centre. The commissioner is
thus at minimum designated
for the area of Rosebank ex officio. On this paltry defect I cannot
refuse to accept the affidavit into
evidence. The replying affidavit
was commissioned at the SAPS Client Service Centre Rosebank.
The
full names of the Commissioner on both the applicants' affidavit are
not printed. On the replying affidavit the force number
of the
Commissioner is printed and the Commissioner can be easily traced
from this. The purpose of the requirement of the full
names of the
Commissioner can once again only be to identify the Commissioner for
any enquiry pertaining to the attestation. I
am certain that with
little trouble the Commissioner of the founding affidavit will be
located through visiting the Rosebank Management
Information Centre
of the SAPS and enquiring whose signature is on the document. The
matter in casu is wholly distinguishable from
the NDPP v
Hlongwe-matter quoted supra. In the Hlongwe-matter the supporting
affidavits were required by section 28(6) of Act 32
of 1998 to be
affirmed or attested to by the Investigating Director; this was not
done. Furthermore there was nothing before that
court indicating that
the affidavits were deposed to before a commissioner as required in
regulation 4(1). Before me there is a
clear indication that the
document was sworn to and signed and "the regulations contained
in Government Notice R1258 dated
21 July 1972 as amended by
Government Notice R1648 dated 19 August 1977, having been complied
with." To add insult to injury
in the Hlongwe-matter there was
also not compliance with regulation 4(1). There was thus not at all
substantial compliance with
the regulations whereas in casu there was
substantial compliance with the regulations.
This
point in limine is dismissed.
5
The following facts are common cause:
5.1
On 5 September 2011 the applicants in writing requested all three the
respondents' access and copies of the register of members
of each of
the respondents. The request was made in terms of
section 26
of the
Companies Act, No 71 of 2008
["the Act']read with Regulation 24
of the Companies Regulations, 2011 ["regulations']. The requests
were sent by registered
mail to each of the respondents registered
addresses as well as to their respective auditors. The requests were
also hand delivered.
5.2
The applicants completed a "Request for Access to Company
Information, Form CoR24 dated 1 September 2011. On this form
the
following was requested;" The Register of Members referred to in
section 26(3)
of the
Companies Act 71 of 2008
."
5.2
By 23 September 2011 Mr Ledwaba of Mponya Ledwaba confirmed that he
acted on behalf of all three respondents. He also indicated
that the
applicants were to pay an access fee of R100.00 for access to each of
the requested records. Mr Ledwaba also requested
an extension of 7
days within which to comply with the applicants' request. In terms of
regulation 24(4)
a company is afforded a period of 14 business days
from the receipt of the request to accede to such request.
5.3
The applicants agreed to an extension until noon on 29 September
2011.
5.4
On 26 September 2011 the applicants electronically transferred the
amount of R300.00 to the banking account of Mponya Ledwaba.
5.5
On 29 September 2011 the applicants request was not complied with.
The attorney on behalf of the applicants phoned Mr Ledwaba
whom
informed him that the records were posted. A written letter followed
confirmed that during this telephone conversation the
applicants'
attorneys demanded access to the records by no later than 9:00 on 30
September 2011. On the same day Mr Ledwaba faxed
documents to the
attorneys of the applicants. These documents were the Certificate of
Confirmation of each of the three respondents.
5.6
The applicants attorneys immediately informed Mr Ledwaba that the
documents were not the documents requested. In response thereto
they
were informed that the applicants were only entitled to the record of
the directors and no other information.
5.7
On 14 October 2011 the applicants' attorney wrote a letter to
respondents' attorney with the relevant paragraph reading as follows:
"If
has come to our knowledge that the
Companies Act was
amended in April
2011, inter alia, by re-numbering the former
s26(3)
as
s26(6).
Our
clients requests were therefor in fact based on
section 26(6)
of the
amended Act. The essence of our client's requests, namely for access
to the registers of members of the aforesaid companies,
however
remains unaltered.
Insofar
as the reference to s26 (3) in the requests may have caused
confusion, we hereby afford your clients the opportunity to
reconsider their refusal to allow our clients access to the registers
of members."
No
response was received to this letter despite a further written
request dated 21 October 2012.
5.8
The respondents are profit companies.
5.9
This application was then launched on 9 November 2011.
6.1
The argument on behalf of the applicants was that as a third party
they were entitled to the securities register/register of
members
under this Act. From the first letter sent requesting access it was
clear to the respondents what information the applicants
required
access to. The court order of Bertelsmann J explicitly expressed the
intention of the applicants in ordering the respondents
to show cause
why the applicants should not be entitled to access to the securities
registers.
6.2
There is no definition of the "register of members" in the
Act and it was argued that this Act and specifically section
26(6)
used the term "register of members" as a neutral term for
non-profit and profit companies; this is so because in
section 26(6)
no distinction is drawn between a non-profit and profit company
whereas section 26(4) draws this distinction. There
is no definition
of a "register of members" whereas "securities
register" is defined as "means the register
required to be
established by a profit company in terms of section 50(1)."
Regulation 32 of the Companies regulations sets
out the prescribed
content of a securities register which is the information the
applicants require access to.
6.3
It was further argued that upon analysis of sections 105 and 113 of
the old
Companies Act with
sections 24(4)
and
50
(1) of the new Act
the access provisions have substantially been replicated from the old
Act to the new
Companies Act. Under
the old Act access of a members
register was granted to any person, provided the prescribed fee was
paid. In the new Act the only
change is a name change in that a
profit company must have a securities register which was the members
register under the old Act.
6.4
It was also submitted that section 26 of the Act advances the
constitutional right of access to information which is entrenched
in
section 32 of the Constitution. In casu the applicants are members of
the media who indicated that they seek access to the respondents'
registers of members in order to establish the shareholding of each
of the respondents so that they can further establish who benefitted
from the state tenders which have been awarded to the respondents. If
there is any doubt as to whether the applicants are in terms
of
section 26(6) entitled to the securities registers of the applicants
then I must adopt an interpretation of this section which
best
promotes the spirit, purport and objects of the Bill of Rights as set
out in section 39(2) of the Constitution.
7.1
The respondent argued that the applicant did not on the papers make
out the relief now claimed in the replying affidavit. A
"securities
register" is not the "register of members" the
applicants sought and the court cannot grant relief
not claimed in
the notice of motion. The applicants built their case as they went on
and still in the replying affidavit is requesting
copies of the
members register. The applicants in the CoR24 Form also only sought
access to the "register of members".
7.2
On behalf of the respondents it was argued that the respondents as
profit companies do not have members because as defined in
the act,
members only relate to non-profit companies. The respondents have
directors. This distinction is very important because
the request to
access was in terms of section 26(6) entitling the applicants only to
inspection and not the copying of the register
of directors. The
applicants' application must be dismissed because they seek an order
that did not derive from section 26(6).
Henochsberg is of the opinion
that section 26(6) only affords "The inspection hours and
payment of the fee however, only apply
to the register of members and
register of directors of a company, thereby excluding the register of
security holders."
7.3
The Court was further urged to take the necessary precautions in
balancing the rights of third parties and Companies and to
protect
Companies against unwarranted invasion.
8.
It is clear that the applicants as third parties are requesting
access to information that would be contained in a "securities
register" and not a "members register." The
respondent's argument is correct that the applicants have used the
terms interchangeably which initially might have led the respondents
to correctly providing access to the "incorrect"
information sought. The application was further incorrect in that the
applicants requested the information in terms of section
26(3), later
in terms of section 26(6) instead of section 26(2).
I
am however satisfied that the nature of the sought after information,
and what type of access was requested, was very clear to
the
respondents when Bertelsmann J ordered the respondents to show cause
why they should not be directed to allow the applicants
to "inspect
and make copies of the original securities register of each of the
three respondents.."[my emphasis] It is
not only opportunistic,
but in contempt of a court order for the respondents not to show
cause why the applicants would not be
entitled to inspect and make
copies of the security registers of the respondents.
9.1
There is a difference between the old Act and the new Act in that
under the new Act a profit company has shareholders, not members
and
a non-profit company can either have members or not; i.e. members and
shareholders are no more the same and "members"
and
"shareholders" cannot be used interchangeably in reference
to a profit company.
9.2
However the new Act just like its predecessor provides for access to
company records. In section 26(1) access to company records
is set
out for a person with a beneficial interest in any "securities
in a profit company or who is a member of a non-profit
company.
Herein the distinction between "members" of a non-profit
company and "shareholders" of a profit company
is
enunciated. Section 26(1 )(e) grants a person with a beneficial
interest access to "the securities register of a profit
company,
or the members register of non-profit company that has members.."
[my emphasis] again reiterating access to a profit
company of their
securities register.
9.3
Section 26(2) reads as follows:
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.[my emphasis]
In
terms of this section a person who does not hold a beneficial
interest in a profit company may inspect or copy the securities
register or the register of directors upon payment of the fee. A
person who is not a member of a non-profit company may inspect
or
copy the register of members of the non-profit company upon payment
of a fee.
9.4
As to what a "securities register" entails Section 24(4)
reads as follows:
In
addition to the requirements of subsection (3), every company must
maintain-
(a)
A securities register or its equivalent, as required by section 50,
in the case of a profit company, or a member's register
in the case
of a non-profit company that has members; and
(b)
.......................... "
Regulation
32 sets out what a securities register must contain. In essence it
requires of a company to set out every class of authorised
securities, the numbers, availability and dates issued. The company
must also in this register set out to whom the company has
issued
securities or to whom securities of the company was transferred. The
name of the person to whom securities were issued as
well as the
business, residential or postal address of that person must be
recorded in the securities register. The e-mail address
and identity
number of a person in this register may be regarded as confidential.
Securities are defined as "means any shares
debentures or other
instruments, irrespective of their form or tile, issued or authorised
to be issued by a profit company, "[s
1]
9.5
The applicants would thus be entitled to inspect or copy the
securities register and directors register upon payment of the
prescribed fee. The applicants were however only requesting the
securities registers of the respondents.
9.6
In the old Act section 113 provided for access to the information
required to be kept by a company in terms of section 105.
Section 105
read very similar to the new regulation 32. Pertaining to access of
non-members in terms of these sections the court
in La Lucia Sands
Share Block v Barkhan
2010 (6) SA 421
(SCA) found the following:
"[9]
The original object of giving non-members a statutory right of
inspection, as contained in s113 of the Act, was to enable
them to
ascertain the identities of the shareholders and the extent of
capital not paid up. See Pathescope (Union) of South Africa
Ltd v
Mallinick 1927 AD at 301 and Meskin et al Henochsberg on the
Companies Act vol
1 at 218. ..."
In
Henochsberg on the
Companies Act, 71 of 2008
in vol 1 p113 he submits
the following:
"The
existence of this right [of giving non-members a right of inspection]
is valuable since a non-member may require knowledge
of the
identities of the members for a variety of reasons, eg to organise an
arrangement under
s 114
or a takeover under the relevant provisions
under Chapter 5, to establish whether the company is a subsidiary of
another company,
to canvass support for a particular proposed
resolution."
This
right is so strong that it has been held that a company may not
require the disclosure of the reason for the inspection as
a
condition precedent to allowing it. This right of a person to inspect
the information that must be kept in a securities register
is
confirmed in the La Lucia-matter supra. This right is entrenched in
the new Act.
9.7
The respondent argued that in terms of section 26(6) the respondents
would only be entitled to inspect the directors register.
The
applicant would be entitled to inspect or copy the securities
register and the directors register in terms of section 26(2).
In
Henochsberg quoted supra on p 111 he aptly described the difference
between sections 26(2) and 26(6) as follows:
"Inspection
of the securities register or members' register is open to the above
persons, or to third parties, but in the latter
instance subject to
the payment of a fee of not more than R100 (sub-s (6)). The
inspection hours and payment of fee however, only
apply to "the
register of members and register of directors of a company thereby
excluding the register of securities holders."
Section 26(6)
reads as follows:
"The
register of members and register of directors of a company, must,
during business hours for reasonable periods be open
to inspection by
any member, free of charge and by any person, upon payment for each
inspection of an amount not more than R100.00."
Section
26(2) thus regulates requests for access to inspect or copy the
register of members or register of securities and directors
whereas
section 26(6) regulates inspection of the register of members and
register of directors at the business during business
hours for
reasonable periods.
9.8
In the La Lucia-matter quoted above the Court found:
"[10]
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.... [11] The parties were agreed that a
court called upon to
act in terms of s113(4) may, in appropriate circumstances, decline to
make an order in favour of the person
requesting the information, for
example where it is shown that the information is sought for some
unlawful purpose. "
In
the matter at hand we know the reason for the request for information
as set out in paragraph 13 of the applicants' replying
affidavit of
which the crux is the following:
"As
members of the media, the applicants seek access to the respondents'
register of members in order to exercise their right
to freedom of
expression and to inform the public on matters of public interest. It
is public knowledge that the first and second
respondents have
benefitted from lucrative state tenders in the Limpopo province....
City press wishes to establish exactly who
the shareholders of the
three respondents are in order to establish who benefitted from state
tenders given to the respondents."
It
was not argued on behalf of the respondent that the request for
access is for unlawful purposes.
In
the La Lucia-matter quoted supra in par[ 13] p 426 the following was
found:
"In
a constitutional State in which freedom of association and access to
information are valued, courts should be slow to make
orders that
have a limiting effect. It bears repeating that in terms of s113(3)
of the Act a failure to comply with a legitimate
request for access
to the register of embers renders a company, and every director or
officer who knowingly is a party to the refusal
guilty of a criminal
offence."
Similarly
Section 26(9) makes it an offence not to accommodate any reasonable
request for access to any record in terms of section
26 or section
31.
All
three the respondents must thus provide copies of the securities
register or inspection thereof. The respondents have set out
no
reasons why the applicants would not be entitled to inspect or copy
the securities register as they were ordered to do by Bertelsmann
J.
10.1
On behalf of the applicants a strong argument was rendered that the
respondents were to be ordered to pay costs on a punitive
scale
because they refused to grant the applicants access since September
2011. The refusal of the respondents is in itself criminal
conduct.
The respondents were given a second bite at the cherry with the
postponement, yet a year later they still have put no
reasons forward
why the applicants would not be entitled to the securities registers.
It would be an appropriate cost order so
as not to leave the
applicants out of pocket.
10.2
The respondents argued that the application be dismissed with costs.
10.3
I am not persuaded that in this case the respondents must pay
punitive costs. The applicants initially requested access to
the
"register of members", incorrectly so. This was corrected
with the order of Bertelsmann J and the respondents cannot
hide
behind the initial incorrect request. The applicants however still
used the phrases" members register" and "securities
register" interchangeably in the replying affidavit. On that
basis the applicants themselves did not act with the prudence
required of them.
11
I accordingly make the following order:
11.1
The first, second and third respondents are ordered to allow the
applicants or their duly authorised representatives to inspect
or
make copies of the securities registers of each of the respondents
within five(5) days of the date of this order;
11.2
The respondents are ordered to pay the costs of the application
jointly and severally.
S.
Potterill
Judge
of the High Court
Matter
heard on: 23 October 2012 Delivered on: 07 November 2012
Attorney
for the Applicants:
WILLEM DE KLERK ATTORNEYS c/o SANET DE LANGE
INCORPORATED 1
st
floor, Duncan Walk, South Wing Cnr.
Duncan
and South Streets Hatfield Pretoria.
Tel:
012 362 3970
(Ref:
S de Lange/al/SA5061)
Attorney
for the Respondents:
MPOYANA
LEDWABA ATTORNEYS
130
Main Street New Muckleneuk Pretoria
Tel:
012 346 4093/4348
(Ref:
MMM/MM/MR LEDWABA)