Your “Private” Company: Just How Private Is Your Register of Members?  

 

Every company – private as well as public – must keep a register showing the names, addresses and shareholdings of all members.

 

A recent Supreme Court of Appeal case confirms that – 

  • This register is – despite common belief to the contrary – fully open to the public (on payment of a nominal fee), even in the case of a privately-held company 

  • It is a criminal offence for a director or company officer to refuse access to the register, or to refuse any request for a copy or extract thereof 
  • An applicant need not give any reason for wanting access, and our courts will only decline to enforce access if there is “something special in the circumstances of the case”; for example “where it is shown that the information is sought for some unlawful purpose”.

In the case in question, the directors of a share block company refused access to a group wanting to approach members directly as part of a takeover scheme, with talk by the directors of protecting their members’ privacy, of protecting them from “predatory practices”, and of not permitting the applicants to “exert influence on members”.  

 

The Court however ordered that the applicants be given full access to the register, commenting that “the establishment of a company as a vehicle for conducting business is not a private matter”.

 

Blunt Pencils, Servitudes And Verbal Contracts

 

“The bluntest pencil is better than the sharpest memory” (old adage)

 

Whilst most verbal agreements are binding in South African law, first prize is always to record them in writing. Otherwise you risk doubt, dispute and delay down the line.

 

Moreover certain types of contract, including those relating to sale or donation of land or any “interest in land”, must be in writing (and signed by all parties) to be valid at all.

 

The danger of overlooking this requirement is neatly illustrated in a recent High Court case, where an elderly couple in financial difficulties sold their house to their son-in-law subject (per a verbal agreement never recorded in writing) to their having the right to reside there for the rest of their lives.

 

When relations in the son-in-law’s marriage became strained, he sold the house to a third party, and the couple found themselves having to go to court in an attempt to enforce their right to stay in the house.

 

They failed. The Court held that such a right of occupation, as a personal servitude over the property, was invalid unless reduced to writing and signed. Furthermore such a servitude must be formally registered against the property’s title deeds to be enforceable (on registration it can be enforced “against all the world”, including any subsequent owners of the land).

 

The Dangers Of A Domicillium Address: And, When Is Domicillium Service Not Valid?

 

Contracts often provide for parties to each choose a domicilium citandi et executandi – a technical term for an address at which you elect to receive all legal notices and documents. Service at this address is considered valid whether or not you actually receive the notice/document, and regardless of whether or not you have since moved or changed address.

 

So be sure to choose an appropriate address up front – one at which any notices or summonses delivered will actually come to your personal attention, and immediately advise the other party (in writing) of any change of address.  

 

Creditors on the other hand need to note a recent High Court decision in which the Court exercised its discretion to disallow service of a bank’s summons against its mortgage debtor by placing it under a rock on vacant land.  

 

Although the debtor had chosen the vacant land as her domicilium (bad choice!), the Court commented that the bank must have had “a great deal of personal information concerning the [debtor]”, and concluded that:  “In those circumstances it seems unfair that the bank made no further effort whatsoever to contact [the debtor] and notify her that it was taking such drastic action against her.”

 

Consumers, Suppliers – Remember These 3 New Rights, Coming Soon! 

 

Note: what follows is of necessity a summary of selected general principles only – there are limitations and exclusions, and you should seek specific advice in the event of any dispute. 

 

When the CPA (Consumer Protection Act) comes into force (scheduled now for 31 March 2011), consumers will acquire a host of new rights relating to the supply of both services and goods. Note that the protection applies only to – 

  • Individuals, and 
  • Smaller corporates, partnerships and trusts (provisionally, those with assets or annual turnovers under R3m). 

The topic is vast – but if you do nothing else, at least keep these three general principles in mind: –

 

1. You are entitled to be supplied good quality, “reasonably suitable”, defect-free, durable and safe goods.That means that if anything you buy fails, or turns out to be defective or unsafe –

 

a) You may return the goods to the supplier – without penalty, and at the supplier’s risk and expense – within 6 months of delivery, and

 

b) You can require the supplier to give you a full refund, or to replace the goods, or to repair them.  The choice is yours; the supplier cannot dictate your options to you.

 

2. If you choose the repair option, and the repair fails (both parts and labour are subject to an implied warranty for 3 months minimum), or if any further defect is discovered during this warranty period, you may return the goods and require either a full refund or replacement.

 

3. If you buy anything via “direct marketing” (i.e. the seller approaches you to buy something), you have a 5 business day cooling-off period to cancel the sale – no questions asked.  The supplier then has 15 business days to refund you any payments made.

 

Don’t be intimidated by any conditions or contractual terms to the contrary – the CPA will override them. 

 

(Suppliers: where there’s a consumer right, there’s a corresponding supplier obligation!  Review all your documentation and procedures with the above principles in mind.)