LA Lucia Sands Share Block Ltd and Others v Barkhan and Others

• Jurisdiction: South Africa
• Judge: Navsa JA, Maya JA, Bosielo JA, Shongwe JA and K Pillay AJA
• Judgment Date: 01 October 2010
• Citation: 2010 (6) SA 421 (SCA)
• Docket Number: 37/2010
• Hearing Date: 02 September 2010
• Counsel: NJ Tee for the appellants. GB Rome for the first and second respondents. F Boda for the third respondent.
• Court: Supreme Court of Appeal

Shongwe JA (Navsa JA, Maya JA, Bosielo JA and K Pillay AJA concurring): A

[1] This is an appeal against a judgment of the KwaZulu-Natal High Court, Durban (Van Zyl J), ordering the first appellant, La Lucia Sands Share Block Ltd (La Lucia Sands) to provide photocopies of all the pages constituting its register of members to the first and second B respondents, Messrs Howard Barkhan and Errol Glasser, alternatively to make its register of members available for inspection by the respondents. La Lucia Sands was ordered to pay the costs of the application, including the costs of two counsel in respect of the Minister of Trade and Industry. The latter order is one about which more will be said later in this judgment. The appeal is with the leave of the court below. I shall refer to C Messrs Barkhan and Glasser as B and G, respectively.

[2] The question in this appeal is whether the court below, acting in terms of s 113(4) of the Companies Act 61 of 1973 (the Act), correctly made the order referred to in the preceding paragraph. D

[3] The dispute between the parties culminating in the present appeal started in 2006 when B and G instructed their attorney to obtain a copy of the register of members of La Lucia Sands since they intended addressing letters to them offering to purchase their shareholding. La Lucia Sands is a share-block company. It appears, however, that antagonism had developed between the parties much earlier, and that E there is prior litigation in which they are involved that includes other parties. La Lucia Sands also accused B and G of being involved with an entity called Flexi Holiday Club in an attempt to engineer a 'hostile takeover' of La Lucia Sands.

[4] The first letter on behalf of B and G requesting copies of La Lucia F Sands' register of members was sent to the latter in May 2006. It was replied to by Mr George Wolfe, an attorney and director of La Lucia Sands, who is also the second appellant. He stated that La Lucia Sands and its members did not want to have their addresses and 'other pertinent private information' divulged. During June 2006 the members of La Lucia Sands in a general meeting passed a resolution to that effect. G Even though there appears to have been later, abortive attempts to provide at least some information, what remained constant was La Lucia Sands' refusal to provide members' addresses and 'other pertinent private information'. Communications and interaction between the parties remained tense. Predictably, the information sought was ultimately H not provided, leading to an application by B and G in the Durban High Court and the order referred to in para [1] above. It is necessary to record that although initially B and G intended to approach members directly concerning their members' interest, without any regard to the board of La Lucia Sands, that position had changed by the time the replying affidavit had been filed by them in the court below. At the time I of the hearing in the Durban High Court it was abundantly clear that they intended to approach both the members and the board simultaneously.

[5] The Minister of Trade and Industry was joined as a respondent in the proceedings in the court below. Initially it appeared that the Minister J

Shongwe JA

A was not intent on being a contesting party. An affidavit was filed on his behalf to be of assistance to the court. However, during the hearing in the court below, the Minister was represented and submissions were made on his behalf. Before us La Lucia Sands sought to reverse the costs order granted against it in the court below even if it lost the appeal, on the basis B that an important constitutional issue had been raised in the court below. It is necessary to record that in the court below the constitutionality of s 113 had been challenged on the basis that it offended against the right of privacy of company members enshrined in s 14 of the Constitution. The challenge was abandoned before us. That notwithstanding, the appellants sought to reverse the costs order on appeal on the basis that C granting a costs order against unsuccessful parties in constitutional matters would have a chilling effect on potential future litigation involving important rights issues.

[6] The court below considered the provisions of s 113 of the Act and held that accessibility to the register of members of a company served an D important public purpose. Van Zyl J concluded that the provisions of s 113 of the Act entitled B and G to the information sought and consequently made the order referred to above.

[7] I turn to a consideration of the relevant statutory provisions. Section 105 of the Act reads as follows:

E 'Register of members

(1) Every company shall keep in one of the official languages of the Republic a register of its members, and shall forthwith enter therein -

(a)

the names and addresses of the members and, in the case of a company having a share capital, a statement of the shares issued to each member, distinguishing each share by its number, if any, and F by its class or kind, and of the amount paid or agreed to be considered as paid on the shares of each member; and

(b)

in respect of each member -

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