---

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

 

IN THE COMPANIES TRIBUNAL OF THE REPUBLIC OF SOUTH AFRICA

(“The Tribunal”)

 

CASE NO: CT024JUN2014

 

Re: In an Application in terms of Section 71(8)(b) of the Companies Act 71 of 2008 (“the Act”) for removal of a director

 

In the matter of:

 

DRIFTER SA (Pty) Ltd

(2013/176442/07)                                                                             THE APPLICANT

AND

 

DEAN GLEN NEL

(I.D. No. 7[...])                                                                          THE RESPONDENT

Coram K. Tootla

 

Decision delivered on 05 November 2014

DECISION

 

INTRODUCTION:

 

[1]               The Applicant who resides at L[...] Place, Cowies Hill, Pinetown, and KwaZulu Natal brings an application in terms of Section 71(8) (b) and Regulation 153 of the Act for a default order that the Respondent be removed both as a shareholder and a director of the company.

 

PROCEDURE:

 

[2]               The Applicant has initiated the proceedings against the Respondent by delivering the form CTR 142 and affidavit to the Respondent via electronic mail. Although this form of service in terms of Annexure 3, Table CR 3 to the Regulations may be used for service, it can be noted that the supporting documents, for example letters via email etc. have not been sent on the letterhead of the company.

 

[3]               It can be noted that the Applicant’s application under CTR FORM 145 was also served via email on the Respondent but the application has not been done on notice of motion as prescribed by the Rules nor is there a supporting affidavit attached to the CTR form 145 for the purpose of obtaining an order by default. The long and the short of this matter is that the Application is procedurally defective. Be that as it may, the Tribunal examines the merits of the matter below.

 

EVALUATION:

 

[4]               According to the Applicant and despite various attempts to contact the Respondent, she has stated under oath that she has been unable to obtain the Identity Document of the Respondent. It can be seen from the papers that he has not filed or served any opposing papers within the time period required to serve and file his opposing papers if he had so desired.

 

[5]               In para 20, the Applicant states under oath that she sent Mr. Olds (from the accountant’s office) to visit the Respondent and to inform him of the legal implications and the requirements with regard to his resignation. According to Annexure “F” the Respondent resigned and relinquished his shares. Unfortunately for the Applicant, there is no evidence under oath from Mr. Olds that in fact this is what occurred and that Annexure “F” was indeed written and signed by the Respondent. The hearsay evidence of Mary Nell cannot in the circumstances be accepted.

 

[6]               Essentially the Applicant has made an application for the removal of the Respondent as a director whilst at the same time claiming that the Respondent has resigned. I deal with the removal of the director in the first instance. In terms of section 71(2) of the Act, there must be a resolution of the shareholders of the company wherein it is resolved that the director concerned be removed.

 

In accordance with the shareholder’s agreement as set out on Page 8-9, the Applicant and Respondent are both shareholders. However in terms of the aforementioned section of the Act, before the shareholders consider taking that resolution, the director who is to be removed must have been given a notice of the meeting and a resolution. The director concerned must also be given an opportunity to make a representation in person or through a representative to a meeting before the resolution is put to a vote. However, there is no evidence that a meeting was called in the form of a notice to the Respondent and by proper service on the Respondent.

 

[7]               When requesting a removal of a director, one has to produce evidence that the respondent was sent a notice of the meeting setting out the purpose of the meeting where he ought to have been requested to make representations why he should not be removed as a director and this is lacking. Under the circumstances, I am not satisfied that the applicant has complied with the requirements of the Act for this course of action. The Applicant has also not deemed it fit to provide the memorandum of Incorporation which may have provided information on the resignation, retirement and removal of directors in certain circumstances.

 

[8]               What is of concern to the Tribunal is that there is confusion in the Applicant’s application as to whether the director has resigned or whether the director is to be removed. In the ordinary course of events and if justified the Tribunal can only grant the order for removal of director if all the requirements are met, which is not the situation.

 

[9]               In any event, the Applicant states categorically that the Respondent has resigned and in the circumstances it cannot be said that a removal of the director is the right course of action. The resignation takes effect as from the date of the written resignation. Once a director has resigned then in that instance and as per the regulations to the Act, a CoR 39 form is to be lodged with CIPC together with the following documentation:-

 

1.      Send an email with the signed CoR39 document, as well as all supporting documents to e[...].

 

2.      Attach the supporting documents required for Director changes to CIPC :

 

a.       Certified identity copy of applicant;

 

b.      Resolution pertaining to the changes;

 

c.       Notice and minutes if the decision was taken in a meeting;

 

d.      Certified ID copies of affected directors;

 

e.       Mandate by the company for the third party to submit on behalf of the company, viz the accountant.

 

[10]           There seems to be a stumbling block as the Applicant alleges that she cannot submit the CoR 39 form as she does not possess the identity document of the Respondent, yet at the same time she requests a removal of the Respondent as a director which application is unjustified and cannot be entertained as the Respondent has according to her resigned. She also requests the Tribunal to remove the Respondent as a shareholder which is not within the jurisdiction of the Tribunal.

 

[11]           Unfortunately for the Applicant, the Tribunal is unable to order the Respondent to provide his identity document as it does not possess jurisdiction to do so. That is within the purview of the High Court. The Applicant’s application is however focused on the removal of the director and not a request to compel the Respondent to provide his identity document.

 

[12]           In the circumstances, the Applicant may have to resort to seek the assistance of CIPC (Companies Intellectual Property Commission) to ensure that the Respondent provides the certified copy of his identity document to record his resignation as director or the High Court.

 

ORDER:

 

The applicant’s application for a removal of director and shareholder is accordingly refused.

 

 

KHATIJA TOOTLA

Member of the Companies Tribunal

05 November 2014

---