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IN THE COMPANIES TRIBUNAL OF THE REPUBLIC OF SOUTH AFRICA
CASE NO: CT02626ADJ2026
Ex parte application:
MIDFIELD HOME OWNERS ASSOCIATION NPC APPLICANT
Presiding Member: Brian Jennings
Date of handing down of decision: 14 April 2026
DECISION
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Introduction
1 The applicant is Midfield Home Owners Association NPC (registration
number: 2005/024376/08), represented by Andre Frederich Oberholzer
(authorised by a resolution passed by the board of directors of the applicant
dated 10 February 2026).
2 The applicant has requested the Companies Tribunal (" Tribunal") to exempt
it from the requirement to have a social and ethics committee. The
applicant's main objects, as a non-profit company, are to –
2.1 promote, advance and protect the communal interests of members of the
association being members who are registered owners of a stand or unit;
2.2 in promoting such communal services, to provide and maintain essential
and community services, amenities and activities within any property
administered by the association; and
2.3 to manage the collective interest common to all its members, which
includes expenditure applicable to the common immovable property of
such members and the collection of levy contributions for which such
members are liable.
3 The applicant has provided me with a breakdown of its public interest score
for the financial year ending 30 June 2025 (being 1403.4)
1, which is
calculated as follows:
1 The applicant has stated in its papers that its public interest score is 1139. However, it is evident from the
breakdown of the public interest score provided to me by the applicant that its public interest score is in fact
1403.4.
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3.1 139 points for the average number of employees of the company during
the financial year;
3.2 4.3 points for every R1 million (or portion thereof) in third party liability of
the company held by creditors at the financial year end;
3.3 28.1 points for every R1 million (or portion thereof) in turnover during the
financial year; and
3.4 1232 points, one point for every member of the non- profit company, at the
end of the financial year.
4 Therefore, by virtue of the applicant’s members alone, the applicant 's public
interest score exceeds 500 by some margin, and the applicant’s public
interest score for its employee count, third party liability and annual turnover
combined is only 171.4.
5 The applicant has also stated that t he basis for the applicant's turnover is
levy income received from the members to provide administrative services,
facility maintenance and inhouse security services to its members.
6 The applicant further notes that the directors are not remunerated or in any
manner reimbursed for their work or their positions.
7 Clause 9 of the applicant’s memorandum of incorporation is also helpful in
that it obliges the board to account to the members at each annual general
meeting.
Applicable law
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8 Section 72(4) of the Companies Act, No 71 of 2008 (as amended)
("Companies Act ") empowers the responsible Minister to prescribe
regulations setting out, amongst other things, a category of companies
required to have a social and ethics committee.
9 Regulation 43(1) (c) to the Companies Act (" Regulations") requires a
company to have a appoint a social and ethics committee if it has, in any two
of its previous five years, scored above 500 points in terms of
Regulation 26(2).
10 Regulation 26(2) sets out the basis for calculating a company's public interest
score. I do not find it necessary to repeat this test here.
11 Section 72(5) of the Companies Act entitles a company who is obliged to
appoint a social and ethics committee, to apply to the Tribunal for an
exemption from such requirement. In order for the Tribunal to be satisfied to
grant such exemption, either –
11.1 the company is required by some other legislation to have, and does have,
some form of formal mechanism within its structures that substantially
performs the function that would otherwise be performed by the social and
ethics committee; or
11.2 it is not reasonably necessary in the public interest to require the company
to have a social and ethics committee, having regard to the nature and
extent of the activities of the company.
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Determination of the applicant's request for exemption
12 The applicant has provided its calculation of its public interest score which
exceeds 500 and would, by virtue of its vast membership body, have done so
in any two of its previous five years, thus it is obliged to appoint a social and
ethics committee.
13 However, the applicant has requested an exemption in terms of
section 72(5)(b) of the Companies Act 2. On this basis, I am satisfied that
valid grounds exist to enable the grant of such exemption. These are as
follows –
13.1 Limited activities: the nature and breadth of the applicant’s activities are,
by definition and by design in its memorandum of incorporation, extremely
limited. They extend only to promoting, advancing and protecting the
communal interests of its members and their affairs inter se, being the use
of common property and areas (roads, pavements, parking areas, dams),
preservation of the environment, regulation of nuisance and making of
house rules in this regard;
13.2 Limited class of persons impacted by such activities: I have
considered that the activities are designed to benefit a closed private body
of persons , being registered holders of stands within the prescribed
geographic area of the estate (noting it may include their guests); and
13.3 Limited geographic area: the activities extend only to the geographic
area of the estate.
2 Noting that it was already granted an exemption by the Tribunal on 5 May 2021, which is soon to expire.
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14 Accordingly I find that it is not reasonably necessary in the public interest to
require the applicant to have a social and ethics committee, having regard to
the nature and extent of the activities of the applicant.
Order
15 The application for an exemption from the requirement to appoint a social
and ethics committee is hereby granted in terms of section 72(5)(b) of the
Companies Act, for a period of five years from the date hereof.
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BRIAN JENNINGS
MEMBER OF THE COMPANIES TRIBUNAL