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COMPANIES TRIBUNAL OF SOUTH AFRICA

Case Number: CT00477ADJ2020

In the ex parte application of:

ZINI RIVER ESTATE HOMEOWNERS ASSOCIATION (RF) NPC         Applicant

(Registration Number: 20[…]8)

Presiding Member: Khashane La M. Manamela (Mr.)

Date of Decision: 29 October 2020

Summary: Application for an extension of time to convene (or postponement of) an annual general meeting or AGM of members – restrictions or measures introduced to combat the COVID-19 pandemic cited as ground for the application - applicant is a non- profit company - application ostensibly based on section 61(7)(b) of the Companies Act 71 of 2008 – section 61(7)(b) only applies to public companies – section 63(2), read with section 10(3) of the Companies Act, permits a company to conduct its shareholders or voting members meeting by electronic communication – held: application fails due to lack of jurisdiction of the part of this Tribunal to grant the relief sought.

DECISION (Reasons and an Order)

Khashane La M. Manamela

Introduction

[1]        Zini River Estate Homeowners Association (RF) NPC, the applicant herein, is a non-profit company based in Mtunzini, KwaZulu-Natal. The applicant says that it was supposed to convene its annual general meeting (AGM) on 01 October 2020, but could not do so. The applicant seeks in terms of this application that this Tribunal extend the period within which the applicant was to convene its AGM or to postpone the holding of the applicant’s AGM to some unspecified date in the future.

[2]       The applicant says it was prevented from holding its AGM by the declaration of a national state of disaster in terms of the Disaster Management Act 57 of 2002 made by the President of the Republic of South Africa.[1] It is widely known by now that, as a result of the President’s declaration, measures were introduced to combat the COVID-19 pandemic on 11 March 2020 followed by imposition of restrictions as to freedom of movement and assembly of persons or gatherings called “lockdown”.[2]

[3]       The COVID-19 restrictions were gradually eased as from end of May or beginning of June 2020. Notably this was months before the applicant’s AGM was due to be held on 01 October 2020. Conceivably, the applicant could have taken the necessary steps to ensure that it was ready to either convene its AGM or bring this application earlier than it was done in this matter. I discuss the these, next.

Timing of (or delay in) bringing this application

[4]       The application appears to have been only received by the registry of this Tribunal on 15 October 2020. Evidently, this was over two weeks after the date on which the applicant’s AGM was supposed to have been held on 01 October 2020. There is no explanation offered for the delay. It may well be that there was a delay somewhere between finalising the application and issuing same, not necessarily attributable to the applicant. But the other activities in the process towards issuing this application do not also appear to have been attended to with the requisite degree of haste. For example, the supporting affidavit was deposed to on 20 September 2020. This was about 10 (ten) calendar days before the applicant’s AGM. But, awkwardly in my respectful view, the notice of motion or Form CTR 142 to which the supporting affidavit is attached is dated 20 (twenty) days before the supporting affidavit on 31 August 2020. The intervening delay between these two activities is also unexplained.

[5]       I mentioned all of the above for the simple reason that this Tribunal is requested to extend the period within which the applicant was supposed to hold its AGM, after the fact. Put differently, this Tribunal is requested to postpone the date of the convening the applicant’s AGM after the date had already passed. Consequently, the question that immediately comes to mind is whether this Tribunal is competent to extend an elapsed period for the holding of an AGM?

[6]       In the matter of II Incentives Limited,[3] which dealt with the “extension” of the 15 months period referred to in section 61(7)(b) of the Companies Act 71 of 2008 (the Companies Act) after it had already expired, the question whether this Tribunal could make an order for extension of period within which to convene an AGM was answered in the affirmative.

[7]       Section 61(7) reads:

“A public pany must convene an annual general meeting of its shareholders-

(a)       initially, no more than 18 months after the company’s date of incorporation; and

(b)       thereafter, once in every calendar year, but no more than 15 months after the date of the previous acomnnual general meeting, or within an extended time allowed by the Companies Tribunal, on good cause shown.”

[8]       In Incentives this Tribunal granted relief despite the expiry of the 15 months’ time-period. This decision was recently relied upon in Sakhile Initiative 2 (RF) Limited.[4] But it is not necessary to express a firm view in this regard for purposes of this decision. For this matter turns on a different aspect, more substantive than the tardiness of the applicant in bringing this application. That aspect is whether this Tribunal is endowed with jurisdiction by the Companies Act to grant the relief sought in this application.

Is the relief sought permissible under the Companies Act?

[9]       The applicant did not specify or disclose the provision in the Companies Act> relied upon for the relief sought in the application.[5] But, the nature and extent of the relief sought leave no doubt that the application or the relief sought is in terms of section 61(7)(b). For I am not aware of any other provision in the Companies Act or its Companies Regulations, 2011 or elsewhere,[6] providing this Tribunal with jurisdiction to postpone or extend the period within which companies are to hold their AGMs. But is section 61(7)(b) competent of application in this matter?