Equistock Properties 8 (Pty) Ltd and Another v Oosthuizen and Others

Equistock Properties 8 (Pty) Ltd was registered in 1999 with directors Willem Oosthuizen, Karen Oosthuizen, and Mr Coetzee Senior (the deceased). The deceased, through his trusts, loaned money to Laduma Biscuits (Pty) Ltd (owned by the Oosthuizens), holding the Oosthuizens' shares in Equistock as security. Between 2000-2002, Equistock purchased two commercial properties in Groblersdal. An oral arrangement existed whereby Laduma would collect rental from Equistock's properties and pay all related expenses. During 2013, the Oosthuizens discovered they had overpaid the deceased by R358,709.18 and instituted action in the Gauteng Division, claiming transfer of their shareholding and repayment. After the deceased's death in 2018, his son Mr Coetzee (second appellant), who had been incarcerated for eight years and uninvolved with Equistock, purported to allocate himself 100% shareholding through a resolution dated 17 May 2021. He then purported to change Equistock's directors, removing the Oosthuizens and adding new directors. On 21 May 2021, a further resolution was passed authorizing an application to direct tenants to pay rentals directly to Equistock and interdicting them from paying the Oosthuizens.

• Whether Mr Coetzee had authority to bring an application on behalf of Equistock
• Whether the resolutions of 17 and 21 May 2021 were valid
• Whether the requirements for a final interdict were satisfied: (a) clear right, (b) injury committed or reasonably apprehended, and (c) absence of other satisfactory remedy
• Whether a personal punitive costs order against Mr Coetzee was appropriate

1. The appeal is dismissed. 2. The second appellant (Mr Coetzee) is to pay the costs of the appeal, including the costs of two counsel, where so employed.

The binding legal principles established are: (1) For an application to be brought on behalf of a company, valid authority must be established through properly constituted resolutions; (2) Company resolutions are invalid where they are based on false claims of shareholding and directorship, and where proper notice was not given to all directors as required by section 74 of the Companies Act 71 of 2008; (3) In opposed motion proceedings, where material facts are disputed, the applicant's case must be evaluated on the facts in the respondent's affidavit together with facts admitted from the applicant's affidavits (Plascon-Evans rule); (4) For a final interdict, the applicant must prove on a balance of probabilities: (a) a clear right, (b) an injury actually committed or reasonably apprehended, and (c) the absence of other satisfactory remedy; (5) Personal costs orders are appropriate where an individual improperly instigates proceedings without requisite authority, and appellate courts will not interfere with costs orders unless discretion was exercised irregularly or injudiciously.

The Court noted that the respondents never utilized the procedure in rule 7(1) of the Uniform Rules of Court to challenge the authority of the appellant's attorneys to act on behalf of Equistock. For that reason, the high court did not find it established that the attorneys were not authorized to act. The Court observed that the deceased himself, who had first-hand knowledge of the facts including the rent collection arrangement, did not during his lifetime seek to do what Mr Coetzee purported to do. The Court characterized the purported meetings and resolutions as a "charade" and stated that Mr Coetzee "delusionally" proceeded to dictate what must be done regarding Equistock's affairs. The judgment also noted that the family feud brought about attempts to change Equistock's directors, and that Mr Coetzee's release from eight years of incarceration for a SARS-related transgression occurred in 2004, after which he had no involvement with Equistock until shortly before the application.

This case reinforces important principles in South African civil procedure and company law: (1) the strict requirements for establishing authority to bring applications on behalf of companies; (2) the validity requirements for company resolutions, including proper notice to all directors under section 74 of the Companies Act 71 of 2008; (3) the application of the Plascon-Evans rule in motion proceedings where material facts are disputed; (4) the comprehensive requirements for obtaining final interdicts; and (5) the circumstances justifying personal costs orders against individuals who improperly institute proceedings without authority. The judgment emphasizes that courts will scrutinize claims of authority carefully and will not permit abuse of corporate structures to pursue personal agendas.