Lawyrer Derrick Ndo Jele has lodged an appeal at the Supreme Court challenging the High Court’s judgment that ordered the restoration of shares in Stage 1 Connections (Pty) Ltd, a company holding shares in Eswatini Mobile, to Cherrybite (Pty) Ltd.
The ruling, delivered by Judge John Magagula, also ordered the removal of Jele’s name as shareholder and director from the company’s register. Jele’s notice of appeal, which stays the execution of the judgment pending the outcome, now places the matter before the apex court for determination.
Jele is the appellant in the matter, while Cherrybite (Pty) Ltd is listed as the first respondent, businessman Michello Shakantu as the second, Stage 1 Connections (Pty) Ltd as third, the registrar of companies as the fourth, and the Master of the High Court the fifth.
According to the notice of appeal, Jele is challenging the entirety of the High Court’s judgment, excluding paragraphs 12 to 14. In the order, the High Court directed that Cherrybite (Pty) Ltd be immediately reinstated as the holder of 1 000 ordinary shares in Stage 1 Connections and ordered the immediate removal of Jele’s name from the register of shareholders and directors.
The order further authorised the sheriff of the High Court to sign all documents necessary to give effect to the orders should the respondents fail to comply.
Related: Shakantu wins Victor Gamedze’s Stage 1 Connections shares battle
Jele, in his capacity as executor in the estate, was also ordered to pay costs, including certified counsel costs.
Jele has raised several grounds of appeal, mainly focusing on the court’s interpretation and application of the law surrounding the protection of shareholding through spoliation proceedings.
He argues that the High Court erred in finding that shares in a company are movables capable of physical possession and therefore subject to protection under the mandament van spolie, a legal remedy traditionally applied to restore possession of tangible property.
Jele maintains that a share in a company is a collection of personal rights entitling the holder to certain benefits in the company, such as assets and dividends, and not something that can be physically possessed.
He relies on the legal precedent set in Standard Bank of South Africa Ltd and Another v Ocean Commodities Inc and Others 1983 (1) SA 276 (A) to argue that the High Court misconstrued the nature of a share.
He further contends that the High Court erred by relying on the judgment in Tigon Ltd v Bestyet Investments (Pty) Ltd 2001 (4) SA 634, which he claims has been widely criticised in legal literature. Jele argues that the Tigon case stretched the precedent set in Bon Quelle (Edms) Bpk v Munisipaliteit van Otavi 1989 (1) SA 508 (A) beyond its intended meaning by suggesting that quasi-possession of shares could be protected under the mandament van spolie.
He submited that Tigon relied on an obiter statement in Rooibokoord Sitrus (Edms) Bpk v Louw’s Creek Sitrus Kooperatiewe Maatskappy Bpk 1964 (3) SA 601 (T), which itself was not definitive on the matter.
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According to Jele, the court in Tigon failed to link the exercise of shareholder rights to any physical thing, which he argued is a prerequisite for the application of spoliation relief. He asserted that the decision in Tigon ignored the foundational principle that the mandament van spolie is limited to restoring the factual possession of corporeal things or certain servitudal rights.
He adds that the court did not heed longstanding judicial warnings that the remedy should not be extended to all forms of rights.
Jele also criticises the High Court for conflating his arguments regarding the contractual nature of shareholding, which arises from a company’s memorandum and articles of association, with arguments relating to the transfer of shares agreement (TSA). He maintains that the respondents explicitly relied on provisions of the TSA in their founding papers, contrary to the High Court’s finding that the application was not based on the enforcement of contractual rights under the TSA.
He contended that the High Court misdirected itself in concluding that contractual rights could be physically possessed and protected under spoliation proceedings. He further argued that the court failed to consider the binding authority of the Supreme Court in Galp Eswatini (Pty) Ltd v Nur Sam (Pty) Ltd t/a Big Tree Filling Station 62/2020 [2020] SZSC13 (3 June 2021), as well as the decision in Telkom SA v Xsinet (Pty) Ltd 2003 (5) SA 309 (SCA), which he says reject the notion that contractual rights can be subject to spoliation relief.
Additionally, Jele challenges the High Court’s finding that the registrar of companies had no legal basis to refuse updating the shareholding records.
He argued that the registrar invited submissions from the respondents and considered those submissions before deciding not to implement the requested changes. Therefore, he maintained that the registrar’s conduct amounted to an administrative decision, contrary to the High Court’s ruling.
Jele is seeking an order from the Supreme Court setting aside the High Court judgment, dismissing the original application with costs, and granting any further or alternative relief deemed appropriate by the court.
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