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JOSE CRISTOVOA PERREIRA DA SILVA N.O
(IN HIS CAPACITY AS TRUSTEE OF THE JOSE
CRISTOVAO PERREIRA DA SILVA FAMILY
TRUST)
Sixth Respondent
MONICA DA SILVA N.O (IN HER CAPACITY AS
TRUSTEE OF THE JOSE CRISTOVAO
PERREIRA DA SILVA FAMILY TRUST)
Seventh Respondent
CRISTOVOA PERREIRA DA SILVA N.O (IN HIS
CAPACITY AS TRUSTEE OF THE JOSE
CRISTOVAO PERREIRA DA SILVA FAMILY
TRUST)
Eighth Respondent
COMPANIES AND INTELLECTUAL PROPERTY
COMMISSION OF SOUTH AFRICA Ninth Respondent
JUDGMENT
This judgment is handed down electronically by circulation to the parties’ legal
representatives by email and by being uploaded to CaseLines. The date and time for
hand down is deemed to be 5 September 2025.
MAHON AJ:
Introduction
[1] This urgent application arises out of a dispute concerning the control of the first
and second respondent companies, Petzone (Pty) Ltd (“PZ”) and Petzone
Franchise (Pty) Ltd (“PZF”). The applicants seek to interdict a shareholders’
meeting of both PZ and PZF scheduled for 8 September 2025, at which the
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removal of the fourth applicant, Mr Mohamed Carrim Jnr, as a director of those
companies is to be considered. The third to eighth respondents oppose the
application.
[2] The fourth applicant serves on the boards of PZ and PZF as the nominee and
representative of the second and third applicants, Shade 9 Trading (Pty) Ltd
and Royal Five Trading (Pty) Ltd. Shade 9 and Royal Five claim to hold,
pursuant to the second cession agreement, fifty percent of the issued shares in
PZ and PZF respectively. The balance of the shares is held by the Cristovao
Pereira da Silva Family Trust. The shares ceded to Shade 9 and Royal Five
were formerly held by the Jose Cristovao Pereira da Silva Family Trust (“the
JCP Trust”), which, under the second cession agreement concluded in
September 2023, ceded all of its shares in PZ to Shade 9 and all of its shares
in PZF to Royal Five.
[3] The applicants accordingly contend that the proposed meeting directly
threatens their rights as cessionaries and shareholders, as it seeks the removal
of their nominee director under circumstances where they are not recognised
as shareholders and would therefore be unable to participate at the proposed
meeting or to vote on the proposed resolution. The respondents dispute that the
applicants have any such rights, maintaining that the second cession is no
longer extant, and that the trusts collectively remain the only shareholders of
PZ and PZF.
Issues and Contentions
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[4] The applicants contend that the second cession agreement concluded in
September 2023 constituted an out-and-out cession of the JCP Trust’s shares
in PZ and PZF, subject only to a duty to re-cede those shares once the
underlying indebtedness had been repaid. They argue that the effect of such a
cession is that all rights flowing from the shares, including the right to exercise
voting powers, vested in the cessionaries, Shade 9 and Royal Five, until such
time as repayment occurs. On their case, the JCP Trust was divested of all
rights and therefore lacked authority to demand or convene a shareholders’
meeting.
[5] The respondents dispute this characterisation. They argue that the second
cession was, at best, a cession in securitatem debiti , designed purely as
security for the repayment of the loans. On this view, the applicants acquired
no more than limited rights dependent upon the existence of the indebtedness,
and those rights lapsed automatically once the debt was repaid. They further
contend that the cession was never perfected, because the share certificates
were not delivered, and that in any event the indebtedness has been
discharged.
[6] The parties are accordingly at odds over whether the cession vested enduring
shareholder rights in Shade 9 and Royal Five or whether it operated merely as
a security arrangement. As will be explained later, the Court’s own assessment
is that the precise label is not determinative, since under either characterisation
the applicants’ rights stand or fall with the continued existence of the underlying
indebtedness.
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[7] The applicants also argue that the notice convening the meeting is defective.
They rely on section 65(3) of the Companies Act, which requires that a
resolution be proposed by at least two shareholders. While section 61(3)
permits a shareholder holding more than ten percent of the voting rights to
demand a meeting, they argue that a single shareholder cannot both requisition
the meeting and propose the resolution. They rely on the decision of this
Division in Foxvest Group (Pty) Ltd v Rocky Park Holdings (Pty) Ltd [2023]
ZAGPJHC 63, where a resolution proposed by only one shareholder was set
aside.
[8] The applicants emphasise the prejudice they will suffer if the meeting proceeds.
The removal of their nominee director would deprive them of board-level
transparency and oversight, compromise the security constituted by the
cession, risk dissipation of company assets, and create an information vacuum
that cannot adequately be repaired later. They submit that such harm would be
irreparable. They rely on East Rock Trading 7 (Pty) Ltd v Eagle Valley Granite
(Pty) Ltd 2012 JOL 28244 (GSJ) and Masstores (Pty) Ltd v Pick n Pay Retailers
(Pty) Ltd 2016 (2) SA 586 (SCA) for the principle that urgent interdictory relief
is appropriate to prevent unlawful conduct that will cause irreparable prejudice.
They further invoke the maxim of “clean hands”, arguing that it was the JCP
Trust’s obligation to deliver the share certificates and it cannot rely on its own
failure to perform as a basis to deny the efficacy of the cession.
[9] The respondents raise several counter-arguments. They submit that the second
cession was never perfected because the share certificates were not delivered,
and that in any event the underlying debt has since been repaid. They
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emphasise that they, and not the applicants, remain the registered shareholders
reflected in the securities register, and therefore alone meet the statutory
definition of “shareholder” entitled to requisition meetings and propose
resolutions. They rely on Incledon (Welkom) (Pty) Ltd v Qwaqwa Development
Corporation Ltd 1990 (4) SA 798 (A) for the distinction between real rights and
mere personal rights.
[10] The respondents further raise a defence of lis pendens, pointing out that the
applicants have already launched an urgent ex parte application on
substantially the same grounds, which remains pending. They also argue that
urgency is self-created, pointing to earlier litigation and correspondence in
which the appointment of the fourth applicant as director was challenged. They
contend that the applicants could and should have acted earlier and rely on In
re Several Matters on the Urgent Court Roll 2013 (1) SA 549 (GSJ). Finally,
they argue that the applicants have an adequate alternative remedy, namely
that the fourth applicant can attend the meeting and make representations as
section 71 of the Companies Act requires, and that any unlawful resolution can
thereafter be set aside.
Evaluation
[11] In my view, the dispute concerning the characterisation of the second cession
is a red herring. Whether the agreement is labelled an out- and-out cession
subject to a duty of re-cession, or a cession in securitatem debiti, the rights of
the cessionaries are dependent upon the continued existence of the underlying
indebtedness. If the debt has been repaid in full, the rights have either reverted
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to the cedent or lapsed by operation of law. If the debt has not been repaid,
those rights endure.
[12] The respondents ask me to find that the debt has been repaid, on the basis that
more than the capital amount was paid and that the applicants have not
produced an accounting to show otherwise. At paragraph 50 of the answering
affidavit, the deponent states as follows:
“50. Ad paragraph 20
50.1 In terms of the second cession:
50.1.1 Shade 9 advanced, in aggregate, R9,721,356.64 to West
Pack Franchise Ltd and PZF; and
50.1.2 Royal Five advanced, in aggregate R9,888,920,09 to West
Pack Lifestyle Franchise Ltd and PZF.
50.2 The respondents' total exposure to Shade 9 and Royal Five
accordingly amounted to R19, 610, 277.54 ("the exposure").
50.3 In settlement of the exposure:
50.3.1 two properties previously owned by West Pack Lifestyle,
namely Erven 8 and 9 Mostyn Park Ext 1 Township, have
been transferred to Shade 9 and Royal Five on 22
September 2023; and
50.3.2 in addition, an amount of at least R1,610,000 was paid by
West Pack Franchise to Shade 9 between 13 October
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2023 and 7 May 2024 as per the schedule attached hereto,
marked "AA20" (a full audit of all amounts paid is currently
being conducted).
50.4 I attach hereto copies of deeds searches in respect of each of the
properties, marked "AA21" and "AA22" and draw the Honourable
Court's attention to the purchase consideration recorded therein,
being R10,000,000 each. The purchase consideration of the two
properties (in aggregate R20,000,000) was not paid. Instead, the
purchase consideration payable was meant to be (and according
to the respondents were) set off against the exposure.
50.5 The applicants failed to disclose any of the aforementioned to this
Honourable Court, both in these proceedings and the ex parte
application.
50.6. The applicants also failed to disclose that the respondents'
attorneys of record responded to the letter attached to the
founding affidavit marked "MC8".A copy of the response, dated
31 July 2025, is attached hereto marked "AA23".
50. 7. In the response, the respondents' attorneys inter alia requested
the applicants to provide it with a statement reflecting the
outstanding balance alleged to be owing to each of the applicants
and setting out the calculation thereof.
50.8. It is submitted that this is an entirely reasonable request and not
at all "spurious", as alleged by the applicants. Particularly under
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circumstances where the respondents hold the view that the
indebtedness for which the security was provided has been
settled in full, as they do.
50.9. Notwithstanding challenge in the ex parte application and the
respondents express request, the applicants continue to avoid an
accounting of the amount alleged to be due.
50.10 In these circumstances the objective facts demonstrate that all
monies advanced has been repaid, and thus neither Carim Snr or
Shade 9 or Royal 5 has any right to enforce the cession
agreements.”
[My emphasis]
[13] During the hearing, I posed the question of whether these passages reflected
that the respondents do not assert any direct knowledge that the debt has in
fact been settled. I observed that they, themselves, do not produce an account
showing that all obligations (capital, interest, rental or otherwise) have been
met. I questioned whether they advance a conclusion drawn solely from the fact
that the total of the payments made exceeds the capital initially advanced.
[14] The cession agreements contemplated that amounts over and above the capital
(described as “rental”) were payable. In those circumstances, the mere fact that
payments exceed the capital amount is not determinative. Some or all of those
payments may have been applied to rental, leaving a portion of the capital debt
still outstanding. Thus, the question is whether the respondents’ own affidavits
demonstrate that they do not know what the true position is or whether their
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allegations go far enough for me to accept the proposition that the underlying
indebtedness has been discharged.
[15] It must also be said that the applicants are not without blame for this stat e of
affairs. They were called upon to provide proper statements of account but
failed to do so. The absence of an accurate accounting obscures what the true
position is, and it is not clear why either party has been unable to get to the
bottom of it. That said, the allegations in the answering affidavit, in my view, go
far enough to have called for rebuttal by the applicant. For whatever reason, the
applicant elected not to deliver a replying affidavit which could have placed
these allegations in dispute. Under those circumstances, it is reasonable for me
to accept the respondents’ version that the debt which was secured by the
cession, has been discharged.
[16] It is not open to the applicants to argue that there may yet be an outstanding
balance when they have chosen not to contest the factual allegations
underpinning the respondents’ conclusion. The absence of a reply means that
the positive assertion by the respondents to the effect that that the debt has
been repaid and the secured rights have fallen away, must stand.
[17] Once that finding is made, the applicants’ case necessarily collapses. Their
rights under the second cession do not endure. Whatever the proper
interpretation of sections 61 and 65 of the Companies Act, and whatever
procedural criticisms may be levelled at the notice convening the meeting, those
issues cannot avail the applicants if they no longer hold rights in the shares. In
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light of this finding, it is not necessary for me to address the other defences
raised by the respondents.
[18] The respondents, as the registered and beneficial owners, are entitled to
requisition the meeting and to determine whether the fourth applicant should be
removed as a director.
Conclusion and Order
[19] For the reasons set out above, I find that the respondents’ allegations in their
answering affidavit, that the indebtedness secured by the second cession has
been repaid, went unanswered and must be accepted. The result is tha t the
applicants’ rights under the second cession have lapsed, and they no longer
enjoy standing to interdict the respondents from exercising the rights of
shareholders.
[20] In these circumstances, the second and third applicants have failed to establish
a prima facie right to the relief sought. Whatever criticisms may be directed at
the notice convening the shareholders’ meeting, those cannot assist the second
and third applicants if they have no enforceable rights in the shares.
[21] The respondents, as the registered and beneficial owners, are entitled to
requisition the meeting and to place before it a resolution for the removal of the
fourth applicant as director.
[22] The argument advanced on behalf of the applicants concerning section 65(3)
of the Companies Act does not avail the fourth applicant. What the present
application seeks to interdict is the convening of the shareholders’ meeting
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itself, not the tabling of a resolution once the meeting is under way. Assuming
the decision in Foxvest is correct — a question on which I express no view — it
does not alter the position here. Two shareholders, who together hold the
entirety of the issued shares, are entitled to table the proposed resolution at the
meeting once it has been duly convened.
[23] The only potential prejudice to the fourth applicant would arise if he were
ambushed at the meeting by the sudden introduction of a resolution of which he
had no prior notice. That is not this case. The notice convening the meeting has
expressly set out that the business of the meeting will be to consider his removal
as a director. He therefore enters the meeting fully apprised of the resolution
that is to be tabled and with an opportunity to exercise the rights conferred upon
him by section 71 to make representations before any vote is taken.
[24] In these circumstances, the reliance on section 65(3) does not provide a basis
to interdict the holding of the meeting. The shareholders are entitled to place
the resolution before the meeting, and if two of them do so, the requirements of
section 65(3) will have been satisfied.
[25] In the circumstances, the following order is made:
1. The application is dismissed.
2. The applicants are ordered to pay the third to eighth respondents’ costs,
such costs to include the costs of two counsel, on scale C.