Teleological Pragmatism, A Historical History and Ignoring the Constitution – Recent Examples From the Supreme Court of Appeal

by | Oct 21, 2019 | SALJ, SALJ V133 I1 2016

Teleological Pragmatism, A Historical History and Ignoring the Constitution – Recent Examples From the Supreme Court of Appeal

Authors Amanda Barratt

ISSN: 1996-2177
Affiliations: Associate Professor in Law, University of Cape Town
Source: South African Law Journal, Volume 133 Issue 1, 2016, p. 189 – 221

Abstract

In Butters v Mncora 2012 (4) SA 1 (SCA), the Supreme Court of Appeal used principles of the societas universorum bonorum to award benefits to an unmarried life-partner. In RH v DE 2014 (6) SA 436 (SCA), the court abolished the civil action for adultery. This article argues that both judgments were weakened by the court’s misunderstanding and misuse of the old common-law sources. The judgments would have been more convincing if the court had researched the context and history of the common law more rigorously. An important weakness of both judgments was the court’s decision to ignore the Constitution. The court thus forfeited an opportunity to infuse the common law with constitutional values. Reliance on the Constitution could also have assisted the court when using historical sources. It is the Constitution which enables the courts to use old common-law sources persuasively and without resorting to teleological pragmatism. The Constitution provides authority for making radical changes to old institutions where this is necessary to promote the spirit, purport and objects of the Bill of Rights. It provides guidance and tools which make ‘the researches of antiquarians’ truly productive for the modern constitutional era.

The Legislative Framework Determining Capacity and Representation of a Company in South African Law and its Implications for the Structuring of Special Purpose Companies

by | Oct 21, 2019 | SALJ, SALJ V133 I1 2016

The Legislative Framework Determining Capacity and Representation of a Company in South African Law and its Implications for the Structuring of Special Purpose Companies

Authors Natania Locke

ISSN: 1996-2177
Affiliations: Professor of Mercantile Law, University of Johannesburg
Source: South African Law Journal, Volume 133 Issue 1, 2016, p. 160 – 188

Abstract

This article considers the provisions regarding the capacity and representation of companies in terms of the Companies Act 71 of 2008, with specific application to special purpose companies. Such companies must comply with the requirements for ring-fenced companies. The capacity of the company must be limited to its special purpose. The amendment of the restricting clause must either be prohibited or must be subject to the additional approval of, for instance, the trustee for debenture-holders. It is recommended that the authority of directors to transact outside the limited purpose of the company must be excluded in a clause in the memorandum of incorporation. The amendment of this clause must be prohibited or restricted. Such a provision would be a ‘restrictive condition’, but even if it were not, prohibition of amendment of the clause would give access to the ring-fence provisions of the Act. Constructive notice may be afforded to such clauses in this manner, thereby excluding the applicability of s 20(7), the common-law Turquand rule, and estoppel. The ratification of actions outside the limited capacity of the company or restricted authority of the directors may be excluded in the memorandum of incorporation. Rather than being an attempt at avoidance, this is a greater restriction than would otherwise apply to a company.

Contesting the Removal of a Director by The Board of Directors Under the Companies Act

by | Oct 20, 2019 | SALJ, SALJ V133 I1 2016

Contesting the Removal of a Director by The Board of Directors Under the Companies Act

Authors Rehana Cassim

ISSN: 1996-2177
Affiliations: Attorney and Notary Public of the High Court of South Africa. Senior Lecturer, Department of Mercantile Law, University of South Africa
Source: South African Law Journal, Volume 133 Issue 1, 2016, p. 133 – 159

Abstract

Section 71(3) of the Companies Act 71 of 2008 has introduced a novel power into our company law, which permits the board of directors of a company under certain circumstances to remove a director from office. While there may be merits in vesting a company’s board of directors with this power, concerns arise whether the fear of removal from office would stifle the actions of a director in managing the company’s affairs, whether the power would be abused, and whether the board of directors could act with ulterior motives in removing a diligent director from office. In Pretorius v PB Meat (Pty) Ltd [2013] ZAWCHC 89, the Western Cape High Court shed some light on the interpretation of s 71(4) of the Companies Act 71 of 2008 and on the power of a director to contest his removal from office. Although the Companies Act 71 of 2008 makes some provision for a director to contest his removal from office by the board of directors, a director who has been unfairly removed from office by the board of directors will nevertheless face certain difficulties. In light of these difficulties and as a result of the Pretorius decision, it is important to guard against the potential for abuse of this new power by boards of directors.