IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Reportable
CASE NO: 19076/2024
In the matter between:
TOERIEN DE WIT N.O. FIRST APPLICANT
PHILLIP RALL N.O. SECOND APPLICANT
and
JAKOBUS GERT SMIT FIRST RESPONDENT
MARYKE SMIT SECOND RESPONDENT
GASVOORSIENERS BOLAND (EDMS) BPK THIRD RESPONDENT
JACOBUS GERT SMIT N.O. FOURTH RESPONDENT
MARYKE SMIT N.O. FIFTH RESPONDENT
ETIENNE BOSHOFF N.O. SIXTH RESPONDENT
[Fourth to Sixth Respondents cited in their capacities as the trustees for the time
being of the Maryke Smit Family Trust]
LENETTE JANSE DE WIT N.O. SEVENTH RESPONDENT
(in her capacity as trustee for the time being of the Elbert de Wit Familie Trust]
WORCESTER GAS (PTY) LTD EIGHTH RESPONDENT
THE COMPANIES AND INTELLECTUAL PROPERTY
COMMISSION NINTH RESPONDENT
Coram: MOOSA AJ
Heard: 14 October 2025
Delivered: 21 October 2025 (delivered via email to the parties)
___________________________________________________________________
ORDER
___________________________________________________________________
The First, Second, and Third to Sixth Respondent’s application for leave to appeal is
dismissed with costs, including costs for two counsel where so employed. Senior
counsels’ fees shall be allowed on tariff scale C ; and tariff scale B for his ju nior.
Liability for costs is joint and several, the one party paying and the other to be
absolved.
___________________________________________________________________
JUDGMENT
(LEAVE TO APPEAL)
___________________________________________________________________
Moosa AJ:
[1] This judgment relates to an application (“the petition”) for leave to appeal to
the Supreme Court of Appeal filed by the First, Second, and Third to Sixth
Respondents (“the Respondents”) in respect of paragraphs 2(b) and 5 of my order
issued on 15 August 2025 (“the orders”). My judgment i s reported sub nom De Wit
NO and Another v Smit and Others (19076/2024) [2025] ZAWCHC 348 (15 August
2025) (“the principal judgment”) . Since appeals lie against court orders rather than
the reasons that underpin them, I do not discuss the reasons for the orders (except
where necessary).
[2] For convenience sake, the parties are referred to as in the principal judgment.
[3] The Applicants filed a n application for leave to cross -appeal. It is, however,
conditional on the Respondents succeeding in their bid for leave to appeal. In view of
the outcome of the petition, it is unnecessary to decide the conditional application.
[4] The orders sought to be appealed reads as follows:
‘2. Consequent on the order in 1 above, final relief is granted pursuant to the
provisions of section 163(2) of the Companies Act 71 of 2008 as follows:
…
b) In accordance with s 163(2)( h), every loan agreement concluded between the
Third Respondent and the trustees of the Maryke Smit Family Trust (MSF Trust)
and every loan advance giving rise to its indebtedness to the Third Respondent
in the sum of R8 954 024,41 (Eight Million Nine Hundred and Fifty -Four
Thousand Twenty Four Rands and Forty One Cents) is set aside. The trustees
for the time being of the MSF Trust is directed to compensate the Third
Respondent by payment to it of the sum of R8 954 024,41 with interest at the
prescribed legal rate computed from the date of this order until the date of final
payment, both days included, which monies shall be paid in full by no later than
31 August 2026; …
5) Costs in the main application and counter -application is awarded to the
Applicants as against the First, Second, Fourth, Fifth, and Sixth Respondents,
including cost for two counsels (senior counsel’s fees are allowed on scale C; his
junior on scale B), such liability to be joint and several, the one paying the other
to be absolved.’
[5] The Respondent’s application is rooted in the grounds of appeal recognised in
s 17(1)(a) of the Superior Courts Act 10 of 2013 (“the SC Act”). These are:
‘(i) the appeal would have a reasonable prospect of success; or
(ii) there is some other compelling reason why the appeal should be heard …’.
[6] The appeal of paragraph 2(b) of my order is sought on two discrete, but inter-
related, grounds. The first is that I erred and misdirected myself in granting an order
related, grounds. The first is that I erred and misdirected myself in granting an order
under s 163(2)(h) of the Companies Act 71 of 2008 (“the Act”) for the setting aside of
the loan agreement s concluded between Gasvoorsieners and the MSF Trust . The
Respondents contend that the impugned loan agreements , and payments
thereunder, occurred in contravention of s 45 and/or s 75(3) of the Act and were,
therefore, void ab initio . Consequently, so the petition avers, there was nothing that
could be set aside.
[7] Although the petition was framed to include s 75 of the Act, Mr Manca SC, for
the Respondents, disavowed any reliance on this aspect of the petition . He stated
that the Re spondents accep t the correctness of my interpretation of the Act at
paragraphs [139] to [141] and paragraphs [144] to [146] of the principal judgment. As
such, the petition is based on s 163(2)( h) allegedly being inapplicable owing to
voidness of the loan agreements under s 45, and on the basis of the second ground
of appeal.
[8] The second ground locates itself in s 165. The Respondents contend that t he
remedy for restitution of monies lent and advanced un der the allegedly void loan
agreements lay with Gasvoorsieners, the Third Respondent . They also assert that
reasonable prospects exist that another court would find that the Applicants should
have used their derivative remedy conferred by s 165(2) and s 165(5) of the Act.
[9] The intended appeal against the costs order is dependent on leave being
granted to appeal paragraph 2(b) of my order. If not, then the costs order stands.
[10] Mr Van Eeden SC, for the Applicants, argued that reliance on s 45 is
misplaced. He pointed out that the Applicants did not br ing their case under s 45 .
Rather, their case was based, and thus decided, on the fact that Gasvoorsieners’
directors contravened 75(3) and (5) of the Act in a manner that was consistent with s
163(1)(c).
[11] With regards to the second ground of appeal, Mr Van Eeden SC contended
that an argument similar to that advanced by Mr Manca SC failed in Parry v Dunn -
Blatch and Others (394/2022) [2024] ZASCA 19 (28 February 2024).
[12] On th ese bases, Mr Van Eeden SC submitted that an appeal in respect of
paragraph 2(b) of my order lacks reasonable prospects of success ; and there is no
compelling reason to grant leave to appeal. For the reasons given below, I agree.
Applicable legal principles
[13] In any petition for l eave, the merits remain a vital consideration. It was held in
Caratco (Pty) Ltd v Independent Advisory (Pty) Ltd 2020 (5) SA 35 (SCA) para 2 that:
‘In order to be granted leave to appeal in terms of s 17(1)(a)(i) and s 17(1)(a)(ii) of
the Superior Courts Act an applicant for leave must satisfy the court that the ap peal
would have a reasonable prospect of success or that there is some other compelling
reason why the appeal should be heard. If the court is unpersuaded of the prospects
of success, it must still enquire into whether there is a compelling reason to enter tain
the appeal. A compelling reason includes an important question of law or a discreet
issue of public importance that will have an effect on future disputes. But here too,
the merits rema in vitally important and are often decisive. Caratco must satisfy this
court that it has met this threshold. ’ (underlining for emphasis) (footnotes
omitted)
[14] Granting leave is not about giving a litigant a second chance to possibly
achieve a different outcome. With regards to s 17(1)(a)(i) of the SC Act, the intended
appeal should have reasonable merits so that a different result would be attained. In
the context of s 17(1)( a)(i), the word ‘would’ has the effect that t he party seeking
leave must demonstrate that an appellate court will (not might) find differently on key
issues of fact and/or law so that a different outcome ‘would’ follow. See MEC for
issues of fact and/or law so that a different outcome ‘would’ follow. See MEC for
Health, Eastern Cape v Mkitha and Another [2016] ZASCA 175 (25 .11. 2016) paras
16 - 17.
[15] That another court might (not ‘would’) come to a different conclusion on key
issues of fact or law ; or that the case raises arguable points; or that the case for
appeal is not hopeless, is insufficient for granting leave . The test under the old
Supreme Court Act, 1959 no longer applies. The new test for leave is more stringent.
See Notshukovu v S (157/2015) [2016] ZASCA 116 para 2. For purposes of s
17(1)(a)(i), a judge must, based on proper grounds, opine that there is a reasonable
(not remote) prospect of success. This requires a dispassionate analysis of the facts
and the law applicable to the issue s sought to be appealed. See S v Smith 2012 (1)
SACR 567 (SCA) para 7.
[16] Given that the merits of the Respondents’ case remain relevant in an enquiry
under s 17(1)(a) of the SC Act , leave can only be granted if, on a sound, rational
basis, I opine that there is a realistic chance (i.e., a real prospect) that an appellate
court would decide differently the outcome of the issues that the Respondents seek
to appeal on the grounds adduced by them in the petition . See Ramakatsa and
Others v African National Congress and Another [2021] ZASCA 31 (31 March 2021)
para 10.
Application of s 17(1)(a)(i) and (ii) of the SC Act to the facts in casu
(a) Paragraph 2(b) of the order: the first ground of appeal
[17] The Applicants did not plead their case for relief under s 163(2) on the basis
of a violation of s 45 that produced results which are oppressive or unfairly
prejudicial to their shareholding interests. The Applicants’ case was predicated on
the First and the Second Respondents, as directors of Gasvoorsieners, contravening
s 75 in ways that caused oppressive and/or unfair prejudice to the Applicant s’
interests as shareholders.
[18] Consequently, the Respondents did not oppose the Applicants’ case on the
basis that there was (or was not) a breach of s 45; nor did they raise the defence that
relief under s 163(2)(h) was not competent owing to a violation of s 45(2) or (3) . The
First and the Second Respondents denied that they acted in violation of the Act.
[19] Reference to s 45 first appeared in the heads filed by the Applicants’ counsel
(at paras 113 - 119). The Respondents’ counsel replied with brief submissions on s
45 in their heads (at paras 28 - 29). At the main hearing, w hen I pointed out to Mr
Van Eeden SC that the Applicants’ case is not grounded in s 45, he conceded. He
then confined the Applicants’ case to that made out in the ir founding papers. The
effect of his concession was that Mr Manca SC did not need to, nor did he, advance
the arguments made in his heads in relation to s 45 (read with s 77(3)(e)) of the Act.
[20] For these reasons, the principal judgment did not determine the Applicants’
case through the lens of s 45. A reading of my judgment reveals the following: (i) it
did not examine whether s 45 was contravened; (ii) nor did it determine that the
impugned loan contracts are void under s 45; (iii) nor did it determine that the
Applicants are entitl ed to relief under s 163(2) due to oppressive or unfairly
prejudicial conduct arising from a contravention of s 45; (iv) nor did I set aside the
impugned loan contracts under s 163(2)(h) by reason of a finding of voidness arising
from a violation of s 45.
[21] In these circumstances, there is no plausible basis for the Respondents to
ground an appeal on the strength of the following averment:
‘1. The court erred and misdirected itself in one or more of the following
respects:
1.1 The loan agreements and paym ents made to the third to fifth respondents
(“the MSF Trust”) were made in contravention of section 45 … of the
Companies Act 71 of 2008 (“the Act”);
1.2 As such there was no agreement which was capable of being set aside under
section 163(2)(h) of the Act’.
[22] Furthermore, although the order sought to be appealed in paragraph 2(b) (see
quote in [4] above) was granted under s 163(2)( h) of the Act, it is no t predicated on
any determination of voidness of the impugned loan contracts. Paragraphs [139],
[140], [141], [145] and [146] of the principal judgment make it clear that my order was
based on a finding that the contracts were voidable by reason that s 75(3) and s
75(5) of the Act were breached (not s 45) in ways that fell within the purview of s
163(1)(c).
[23] In the premises, I find that a sound, rational basis does not exist to justify a
finding that the first ground of appeal adduced would have reasonable prospects of
success on appeal. I am fortified in this view based on the ensuing further reasons.
[24] First, the Respondents seek to ground their appeal on a factual basis that was
not pleaded by them (nor by the Applicants). No reliance was placed on s 45. This is
clear from the pleadings viewed as a whole. Moreover, the Respondents seek t o
appeal paragraph 2(b) of my order on the basis that I misdirected myself in setting
aside contracts under s 163(2)( h) which were , so they contend, void for non-
compliance with s 45. Factually, this is incorrect. I did not find that s 45 was
breached; nor did I find that the agreements were void. I expressly held that the loan
agreements were voidable and, as such, capable of being set aside by court order.
[25] Secondly, at paragraphs [75] to [83] of the principal judgment, I interpreted the
provisions of s 163 (2) and the circumstances under which relief thereunder may be
granted. My interpretation is not challenged. At paragraph [84], I held as follows:
‘For these reasons, I conclude that even if the impugned loan agreements with, and
the loan advances to the MSF Trust, or any of them, are void under the Companies
Act, then this would not preclude an equitable interim or final remedy being granted
in the exercise of this Court’s wide discretionary powers under the aegis of s 163(2).
This is so provided that I am satisfied that the jurisdictional requirements of s 163(1)
are met. It is to this factual issue that I now turn my attention.’
[26] My conclusion in this quoted extract forms the basis for the following
statement at paragraph [153] of the principal judgment:
‘Finally, if I am wrong in my interpretive conclusions outlined in paragraphs [140] and
[146] above and the relevant contracts concluded in breach of s 75(3) and/or (5) are
actually void ab initio, then, for the reasons given in paragraphs [75] to [82], the
Applicants would still be entitled to equitable relief as fashioned by me. In such event,
I would have granted them the same compensatory relief as framed in the relevant
order below, save that I would not have granted it pursuant to s 163(2)(h), nor would I
have ordered a setting aside of the relevant loan contracts because they would be
void.
[27] In the absence of a challenge to my interpretation of s 163(2) and my finding
that its provisions empower a court to grant a just and equitable remedy even when
contracts are void, the Respondents have no realistic prospect of succeeding in an
appeal predicated on a contention that voidness of the loan contracts could not be
remedied by the exercise of a court’s wide discretionary powers conferred by s
163(2).
[28] Thirdly, Mr Manca SC argued that the impugned loan agreements are void
163(2).
[28] Thirdly, Mr Manca SC argued that the impugned loan agreements are void
because the directors ’ resolutions authorising them contravened s 45(2) as
envisaged by s 45(6). He submitted that, on this basis, Gasvoorsieners had a
remedy to sue the MSF Trust . He submitted further that the Applicants should have
used the remedy in s 165. This argument has no realistic prospect of success on
appeal.
[29] Section 45(7) provides that where a company resolution contravenes s 45(2),
or a provision of financial assistance by the company contravenes s 45, then the
company director(s) who is/are responsible for the voidness envisaged by s 45(6) ‘is
liable to the extent set out in section 77(3)( e)(v)’. On this legal basis, t he case which
the Respondents seek to make on appeal, namely, that the Applicants should have
pursued a derivative claim against the MSF Trust for repayment , does not hold
water.
[30] It seems odd that the First and the Second Respondent would seek leave to
present a case at the SCA that the loan contracts concluded by them as directors of
Gasvoorsieners with the MSF Trust , and the loa n advances effected from
Gasvoorsieners to the MSF Trust, are void as envisaged by s 45(6), thereby creating
against themselves , under s 45(7) (read with s 77(3)( e)(v)), potential claims for
personal liability of the R8 954 024,41 dealt with in paragraph 2(b) of my order.
However, when the prescription provision in s 77(7) is considered, then the absence
of any potential risk of personal liability is stark.
[31] Fourthly, in his heads of argument filed in the main case (at paragraph 28), Mr
Manca SC pointed out, correctly so, that s 45(6) does not render void a board of
director’s decision made in contravention of s 45(2); nor does s 45(6) render
contracts concluded pursuant to an impugned resolution to be void. This flows from s
77(5)(a) expressly stipulating that an application may be made to court ‘for an order
setting aside the decision of the board’. Section 77(5)( b)(ii)(aa) empowers courts ‘to
rectify the decision, reverse any transaction, or restore any consideration paid or
benefit received by any person in terms of the decision of the board’. In law, none of
these orders would be possible if the director’s decision to enter into a contract is
void. The same position applies to any impugned contract and any payment made
thereunder.
[32] Consequently, the Respondents have no realistic prospect of succeeding on
appeal to show that a resolution taken in violation of s 45(2) had the effect of
rendering void ab initio the First and the Second Respondents’ decision as directors
to give loans to the MSF Trust; nor rendered void any of the impugned contracts and
loan advances.
[33] Fifthly, Mr Manca SC argue d that the Applicants erroneously pursued the
recovery of the monies loaned to the MSF Trust via a just and equitable remedy. He
submitted that the voidness of the contracts gave rise to a claim for restitution in the
hands of Gasvoorsieners. Owing to s 77(5)(b)(ii)(aa) (discussed by Mr Manca SC at
para 28 of his heads in the main case), his submission as to the voidness of the loan
contracts lacks merit. I opine that it’s prospects for success are remote, at best.
[34] In terms of s 77(5)( b)(ii)(aa), a court may ‘reverse any transaction, or restore
any consideration paid or benefit received by any person in terms of the decision of
the board’ if it is ‘just and equitable’ to do so where s 45 has been breached.
Accordingly, the remedy pursued by the Applicants is similar to that in s
77(5)(b)(ii)(aa).
[35] Sixthly, s 45(2) provides that ‘the board may authorise the company to provide
direct or indirect financial assistance’ to a related third party, unless the
Memorandum of Incorporation (“the MOI”) of the relevant company prohibit such
loans. The contents of the MOI for Gasvoorsieners w as not traversed in the
pleadings. Accordingly, there is no factual basis to contend, nor for a court to justify a
finding, that the financial assistance to the MSF Trust contravened the MOI of
Gasvoorsieners.
[36] Consequently, I opine that there is no sound, rational basis to justifiably
conclude that the Respondents have reasonable prospects to persuade an appellate
court (i) that a contravention of s 45(2) occurred when the directors authorised the
loan to the MSF Trust; and (ii) that any such contravention led to voidness of the loan
contracts and the loan advances; and (iii) that Gasvoorsieners has a n enforceable
claim under s 77(5)(b)(ii)(aa) which could validly form the basis of a derivative action
under s 165. Any such claim, if it did exist, would be hit by prescription under s 77(7).
[37] Seventhly, the Respondents do not challenge my finding that the Applicants
established oppressive and/or unfairly prejudicial conduct of the kind envisaged by s
163(1)(c). Consequently, they do not challenge my finding that this Court’s equitable
jurisdiction under s 163(2) was triggered. Importantly, the Respondents do not
challenge the exercise of my wide discretion under s 163(2) . For e.g., t hey do not
assert that my discretion was exercised injudiciously and, as such, that reasonable
prospects exist that the orders would be set aside on appeal.
[38] As stated in paragraph [7], the Respondents do not seek to appeal my finding
that it is just and equitable to set aside the loan contracts; nor do they seek to appeal
my order to that effect . That order addresses and/or cures the oppressi ve and
unfairly prejudicial conduct which I found was proved. My order is catered for in s
163(2)(h).
[39] When the application for leave is properly understood, then it is evident that
the Respondents, in fact, seek to appeal the compensation awarded to
Gasvoorsieners, being R8 954 024,41. However, the petition does not challenge the
exercise of my discretion to award compensation . Given that the Respondents do
not seek to appeal the exercise of my equitable discretionary authority to award
compensation in the form and/or amount that I awarded, I opine that a sound,
rational basis is lacking on which a conclusion can be drawn that reasonable
prospects exists that the compensation award would be set aside on appeal on any
grounds recognised in law.
[40] I pause to observe that it is surprising that Gasvoorsieners and its current
director and former director (namely, the First and the Second Respondent) seek to
appeal paragraph 2(b) of my order. It benefits Gasvoorsieners. This observation
lends support to my view that the petition is ill-considered and ill-fated.
[41] In the premises , I conclude that the first ground of appeal adduced does not
pass the test in s 17(1)( a)(i) of the SC Act. I now address the second ground of
appeal.
(b) Paragraph 2(b) of the order: the second ground of appeal
[42] The nub of the second ground of appeal is summarised in paragraph [8]
above. That ground is intertwined with the first. The Respondents contend that
reasonable prospects exist that another court would find the loan contracts with the
MSF Trust are void for want of compliance with s 45 so that a claim for restitution of
monies advanced on loan lay with Gasvoorsieners. On this basis, and relying on
Business Doctor Consortium v Old Mutual Finance (RF) 2022 JDR 2891 (WCC) para
104, the Respondents contend that reasonable prospects exist that an appellate
court would hold that the Applicants’ remedy for the recovery of the loans lay in a
derivative action under s 165 , and that they lack locus standi under s 163 for
purposes of that recovery.
[43] Mr Manca SC acknowledged that the First Respondents' answering affidavit
addressed the locus standi issue as a point in limine; however, they chose not to
pursue it during at the main hearing. For this reason, that issue was not dealt with in
the principal judgment. Mr Manca SC argued that the locus standi issue can form the
basis of an appeal as that point was not abandoned. For present purposes, I assume
(but without deciding) that this submission is sound in law.
[44] The kernel of Mr Manca SC’s argument is that the locus standi point is good
in law and that reasonable prospects exist that an appellate court would find that the
Applicants could not use s 163(2)( h) to recover the monies loaned to the MSF Trust
in terms of contracts which were void under s 45(6). For the ensuing reasons, I hold
that the second ground of appeal does not pass muster under s 17(1)( a) of the SC
Act.
[45] First, the locus standi challenge as formulated for purposes of the petition is
not the same point in limine that was raised in the First Respondent’s answering
affidavit at para graphs 7 to 13 under the sub -heading ‘Locus standi’ which, in turn,
appears under the main heading ‘Preliminary defences’. At paragraph 10 of that
affidavit, reference is made to the fact that the Applicants’ claims in paragraphs 1.1 to
1.5 and 1.11 of their Notice of Motion are based on alleged non-compliance with s
37, s 75(3), and/or s 76(2)(a) of the Act. In the answer, the Respondents averred:
’12. It appears that the Trust [the Applicants] may be aware of the effect of section
165 of the Companies Act and has accordingly sought to pigeonhole these
---
claims under the rubric of section 163 of the Companies Act. This is
impermissible.
13. The Applicants therefore lack the necessary locus standi in respect of these
claims.’
In formulating the locus standi challenge , no reference was made to s 45 . This is
because the Applicants’ papers d id not allege any non-compliance wi th this
provision.
[46] During the hearing of the petition, I informed Mr Manca SC that s 45 was not a
component of the Applicants’ case, nor did it form part of the Respondent’s case. I
pointed out to him that reliance on s 45 for purposes of the locus standi challenge
surfaced for the first time in the petition . Mr Manca SC conceded this . However, he
then cited Moroka v Premier, Free State Province and Others (295/20) [2022]
ZASCA 34 (31 March 2022) para 36 as authority for his proposition that it is
permissible for the Respondents to introduce a new point of law in an appeal.
[47] The locus standi challenge is not a new point. It was pertinently pleaded. The
new element raised are new facts, namely, alleged contraventions of s 45(2) as
envisioned by s 45(6) , which new facts are sought to be used to lay the foundation
for the contention that the loan contracts with the MSF Trust are void and that, in this
factual matrix, Gasvoorsieners (and not the Applicants) has been harmed and that
Gasvoorsieners has a claim against the MSF Trust for repayment of the loan monies,
which claim the Applicants should have enforced using a derivative action under s
165.
[48] The introduction of a new factual basis to ground the locus standi challenge is
impermissible. It offends notions of fairness that underpin our system of appeals .
In Provincial Commissioner, Gauteng South African Police Services and Another v
Mnguni [2013] 2 All SA 262 (SCA) para 27 , this salutary principle was expressed as
follows:
‘It is indeed open to a party to raise a new point of law on appeal for the first time,
with the provision that it does not result in unfairness to the other party;
that it does not raise new factual issues and does not cause prejudice.’
[49] Apart from the fact that no reasonable prospect exists that the s 45 basis for
the locus standi challenge would be permitted on appeal, I have explained elsewhere
above that the pleaded facts viewed holistically do not make a case for breach of s
45.
[50] Secondly, the Respondents’ reliance on Business Doctor Consortium v Old
Mutual Finance supra is misplaced. That case is factually distinguishable in material
respects. There, Wille J held (at paras 149 - 150) that the applicants failed to prove
the partic ular species of oppressive or unfairly prejudicial conduct that they had
alleged. On that factual matrix, he concluded that the jurisdictional pre-requisites for
the invocation of the court’s jurisdiction under s 163(2) were not met.
[51] I concluded in the principal judgment that the Applicants discharged the onus
to prove the jurisdictional facts laid down in s 163(1)(c) as pre-requisites for equitable
relief under s 163(2) of the Act. This is materially different to the facts before Wille J.
[52] Thirdly, in Business Doctor Consortium v Old Mutual Finance supra paras 104
- 114, Wille J held that the applicants in that case were not entitled to any remedy
under s 163(2). However, they had access to a derivative action through s 165 which
could, and should, have been utilised. Wille J held that t he remedy permitted by s
165 was available because the harm was done to the company (not to the
shareholders).
[53] The latter finding in Business Doctor Consortium v Old Mutual Finan ce supra
also renders that case factually distinguishable from the present case in a material
respect. In the principal judgment, I held that the Applicants were victims of
oppressive and unfairly prejudicial conduct caused by Gasvoorsieners ’ directors ,
namely, the First and the Second Respondent. On the facts before me, I held further
that the Applicants’ interests in Gasvoorsieners were harmed by the oppressive and
unfairly prejudicial conduct within the contemplation of s 163(1)( c) and that the y are
entitled to just and equitable relief under s 163(2). None of these factual findings and
conclusions of law are sought to be challenged on appeal . Therefore, they will
remain intact in any appeal.
[54] Accordingly, I opine that no sound, rational basi s exists to justify a conclusion
that an appellate court would hold that the Applicants lack locus standi under s 163.
[55] Fourthly, the Respondents contend that the loan contracts are void owing to
an alleged contravention of s 45(2) as envisaged by s 45(6). On this basis, they
argue that Gasvoorsieners was harmed and that it has a claim for restitution of
monies from the MSF Trust . I have, in relation to the first ground of appeal, already
shown that the contention that a contravention of s 45 leads to voidness of the loan
contracts is bad.
[56] On the case sought to be presented at the SCA , any claim envisioned by s
45(6) that arises from a n alleged contravention of s 45(2) , if such a contravention
was capable of proof on t he plead ed facts , would lie against the First and the
Second Respondent personally. This stems from the operation of s 45(7) and s
77(3)(e)(v).
[57] However, any claim against the First and the Second Respondent, and the
associated just and equitable claim against the MSF Trust under s 77(5)( b)(ii)(aa),
are hit by s 77(7) . Given that a remedy must be effective, objective ly implementable,
and available (see Basson v Hugo and Others (968/16) [2017] ZASCA 192 (01
January 2018) para 12), there is no sound, rational basis to conclude that , on
appeal, the Applicants would be non -suited under s 163 in favour of an alternative
equitable derivative remedy that was, seemingly, hit by prescription. Such a result
would also be inimical to the notions of justice and equity embraced by s 163 and s
77(5)(b)(ii); and would defeat the objectives sought to be achieved by the
Companies Act (such as, delicately and fairly balancing the interests of shareholders
and directors, and the companies in which they have such interests) . See Parry v
Dunn-Blatch and Others 2024 JDR 0864 (SCA) para 36 ; Technology Corporate
Management (Pty) Ltd and Others v De Sousa and Another (613/2017) [2024]
ZASCA 29 (26 March 2024).
[58] Fifthly, the remedy fashioned by the legislature in s 77(5)( b)(ii)(aa) does not
provide a definitive claim against the MSF Trust for the recovery of monies advanced
to it pursuant to loan agreements concluded in violation of the prescripts of s 45. In a
substantially similar vein to s 163(2)( h), a court may, if it is just and equitable in the
circumstances to do so, grant an order against the MSF Trust to restore any benefit
received by it under an impugned loan agreement which the court may set aside if it
decides to reverse a transaction concluded by the board of directors in breach of s
45.
[59] The remedy in s 77(5)( b)(ii)(aa) is only available if an application is made to
court by the relevant company or its director s who seek an order setting aside the
impugned decision(s) of the board. Gasvoorsieners did not pursue any such steps .
On the facts before me, there is no factual basis to justifiably conclude that s 45 was
breached so that the claim in s 45(7) read with s 77(3) ensues. Consequently, there
is no real prospect of an appellate court finding that the Applicants could have viably
used s 165 to compel Gasvoorsieners to take the steps envisaged by s
77(5)(b)(ii)(aa) (assuming the claim thereunder did not prescribe pursuant to s
77(7)).
[60] Sixthly, on the locus standi challenge, the Respondents contend that
reasonable prospects exist that an appellate court would non -suit the Applicants
under s 163 and hold that they should have invoked a derivative remedy under s
165. In Parry v Dunn -Blatch supra paras 25 - 31, 36 , the SCA rejected a similar
contention. Accordingly, I opine that there exists no reasonable prospect that t he
SCA would, on appeal, non-suit the Applicants under s 163 in favour of a remedy in s
165. The Applicants proved the jurisdictional facts stipulated in s 163(1)(c) for their
entitlement to seek just and equitable relief under s 163(2). My finding in the principal
judgment that the Applicants proved those jurisdictional facts will be unchallenged in
any appeal.
[61] In an attempt t o ease the pinch of the decision in Parry v Dunn-Blatch supra,
the Respondents’ counsel argued that the SCA’s decision on this issue was obiter
and, th erefore, non-binding. This argument lacks mer it. A reading of the SCA
judgment reveals that the court dealt with the issue of locus standi as part of its ratio
decidendi. The SCA held that the lower court was wrong to uphold the locus standi
challenge. That finding then paved the way for the SCA to consider whether the
applicant established oppressive conduct, and/or unfairly prejudicial conduct, and/or
unfairly disregardful conduct envisaged by s 163(1). The SCA held that none was
proved.
[62] Even if the locus standi decision in Parry v Dunn-Blatch supra is obiter, then it
remains a ruling laden with persuasive value. It has been applied in this Division (see
Briers and Another v Dr J Bruwer and Associates No 78 Inc and Others
(19726/2023) [2025] ZAWCHC 223 (27 May 2025) para 73) and in other Divisions
too (see Cossadianos and Others v Nel and Others (2024-104634) [2025]
ZAGPPHC 284 (17 March 2025) paras 23 - 26). The Respondents ’ counsel
advanced no basis which would justify an opinion that reasonable prospects exist
that, on appeal, the SCA would revisit and overturn its decision in Parry v Dunn -
Blatch supra on the issue of standing.
[63] The locus standi challenge also does not raise any compelling reason for
leave to appeal within the contemplation of s 17(1)( a)(ii) of the SC Act. The same
applies to the first ground of appeal dealt with elsewhere above. In the petition, the
Respondents contend that leave ought to be granted under s 17(1)(a)(ii) as this case
deals with a novel issue, namely, a determination of whether a contract concluded by
a company pursuant t o a violation of s 73(3) and s 73(5) renders the contract, and
any transaction thereunder, void or voidable . In the petition, t he Respondents
contend that this issue constitutes a compelling reason for the granting of leave to
appeal. I disagree.
[64] As a general principle, merely because a judgment engages with a novel
question of law does not per se establish a compelling reason for the granting of
leave to appeal. For purposes of the m ore stringent test established by s 17(1)( a) of
the SC Act, something more would be required than a novel legal issue. If this were
not so, then cases would be eligible for leave even in circumstances where, for e.g.,
the prospect of another court differ ing with the decision reached on the novel legal
question is remote. Such a de jure position would undermine s 17(1)(a) in its current
formulation, and would be at odds with the jurisprudence that has developed
thereon.
[65] In this regard, I align myself fully with the sentiment s expressed in Van
Niekerk v MV "M adiba 1" (AC13/2018) [2022] ZAWCHC 152 (15 August 2022) by
Binns-Ward J in the following extract:
‘But the fact that an obviously bad point has not previously been raised and rejected
does not afford a compelling reason for the court of first instance to grant leave to
appeal when such a point is first raised and predictably rejected.’ (para 12)
[66] As appears from paragraph [7] above, t he novel issue relied on in the petition
has fallen away. Therefore, it can, in any even t, not form a basis for an appeal here.
Mr Manca SC conceded that when the legislature confers authority on a court , as it
does in s 75(7) and s 75 (8), to declare act s performed and contract s executed in
contravention of s 75(3) and s 75(5) to be valid, then logic dictates that the lawmaker
does not intend to visit a nullity on them. The same reasoning must apply equally to
s 45. O wing to the judicial powers conferred by s 77(5)( a) and ( b) (discussed in
paragraphs [33] to [36] above), logic dictates that the legislature does not intend to
render void those director decisions and company transactions that are tainted fruits
of a procedural violation of s 45, or other non-compliance with s 45. This conclusion
bolsters my view that the petition for leave in this case is bad and falls to be
dismissed.
Costs
[67] There is no reason to deviate from the usual rule that costs follow success .
Both sides used senior and junior counsel for purposes of the application for leave to
appeal. Therefore, both sides must be taken to be satisfied that cost of two counsel
is justified. I agree. During the hearing, it also became necessary for the junior
counsels to conduct research on points of law which emerged at the hearing, and for
them to be consulted by their respective seniors . As such, I am satisfied that the use
of two counsels were necessary for purposes of the appeal proceeding.
Order
[68] In the result, the First, the Second, and the Third to the Sixth Respondents’
application for leave to appeal is dismissed with costs, such costs to include the
costs for two counsel (where employed). Senior counsels’ fees shall be allowed on
tariff scale C; and tariff scale B shall be used for his ju nior. Liability for costs is joint
and several, the one respondent party paying and the other to be absolved.
_____________________
F. MOOSA
ACTING JUDGE OF THE HIGH COURT
Appearances
For Applicants: P van Eeden SC (with P Gabriel)
Instructed by: Marais Muller Hendricks (J Grobbelaar)
For the Respondents: B Manca SC (with MM van Staden)
(First, Second, Third to Sixth Respondents)
Instructed by: Mostert & Bosman Attorneys