Nova Property Group Holdings Ltd v Cobbett

Cobbett, a financial journalist, and Moneyweb, a financial news publisher, sought access to the securities registers of Nova Property Group Holdings Ltd and related companies (the Companies) under section 26(2) of the Companies Act 71 of 2008. The requests were made as part of an investigation into the Companies' alleged links to the Sharemax property syndication investment scheme. When the Companies refused access, Moneyweb launched an application to compel access. Instead of filing an answering affidavit, the Companies issued notices under Rule 35 of the Uniform Rules seeking documents from Moneyweb, asserting they needed to interrogate Moneyweb's 'real motives' which they alleged involved a 'sinister agenda'. The Companies launched an interlocutory application to compel discovery of these documents. The High Court granted discovery of documents referred to in Moneyweb's founding affidavit but dismissed the Rule 35(14) application. The Companies appealed.

• Whether the High Court's interlocutory order dismissing the Rule 35(14) application is appealable
• Whether section 26(2) of the Companies Act 71 of 2008 confers an unqualified right of access to a company's securities register
• Whether access to securities registers under section 26(2) is subject to the limitations and procedures of the Promotion of Access to Information Act 2 of 2000 (PAIA)
• Whether the motive of a person requesting access to a securities register is relevant to their entitlement to access
• Whether the Companies demonstrated that documents sought under Rule 35(14) are relevant to a reasonably anticipated issue in the main application
• Whether an unqualified right of access to securities registers violates shareholders' constitutional rights to privacy and dignity

The appeal was dismissed with costs, including costs of two counsel.

Section 26(2) of the Companies Act 71 of 2008 confers an unqualified right of access to securities registers on any person who makes a request in the prescribed manner. This right is independent of and additional to rights under PAIA, as expressly provided in sections 26(4) and 26(7). A company that receives a proper request must comply within 14 business days under section 26(5). The motive or purpose of a person seeking access is irrelevant to their entitlement to access. The right is not subject to PAIA's threshold requirements, grounds of refusal, or third-party procedures. A court has no discretion to refuse an order compelling access where a proper request has been made and refused, unlike under the predecessor provision (section 113 of the old Companies Act). Parliament deliberately chose to create an unqualified right by using peremptory language and not including the discretionary override that existed in prior legislation. This construction promotes the constitutional values of transparency, accountability, and access to information, and is essential for investigative journalism and media freedom. Privacy rights of shareholders are minimally implicated given the limited personal information required in securities registers and regulatory safeguards for confidentiality.

The Court corrected the obiter dictum in La Lucia Sands Share Block Ltd v Barkhan 2010 (6) SA 421 (SCA) which suggested that PAIA procedures would apply to requests under section 26 of the new Companies Act - this was plainly wrong given the express language of section 26(7). The Court noted that PAIA procedures can be used as an instrument to frustrate and delay access to records, which Parliament sought to avoid by creating the unqualified right in section 26(2). The Court discussed the principle from Midi Television v DPP (WC) that courts will only rarely make orders amounting to prior restraints on expression, and noted that the Companies' approach effectively sought prior restraint by preventing investigation rather than publication. The Court observed that if Parliament wishes to qualify the section 26(2) right (as the UK did in the Companies Act 2006 by introducing a 'proper purpose' test), it can legislate accordingly but has chosen not to do so. The Court granted leave to the amicus curiae (amaBhungane) to adduce evidence on appeal, clarifying that while not expressly provided for in the rules, section 173 of the Constitution empowers the court to allow an amicus to adduce evidence where doing so promotes the interests of justice, particularly in public interest matters. The Court noted that access to accurate information is critical for media to fulfill their constitutional duty to report accurately, and preventing access to definitive information undermines both media rights and the public's right to receive accurate information.

This judgment is of fundamental importance in South African company law and constitutional law. It authoritatively establishes that section 26(2) of the Companies Act 71 of 2008 confers an unqualified right of access to securities registers, resolving conflicting High Court decisions. The judgment clarifies that this right operates independently of PAIA and that a requester's motive is irrelevant. It emphasizes the constitutional values of transparency, openness, and accountability in corporate governance, recognizing that establishing a company is not purely a private matter. The judgment is particularly significant for investigative journalism and media freedom, as it ensures timely access to corporate information essential for accurate reporting on matters of public interest. It provides strong protection against prior restraint and procedural tactics that could frustrate constitutional and statutory rights of access to information. The judgment also demonstrates how courts should interpret legislation to promote constitutional values, particularly the rights to access information (section 32) and freedom of expression (section 16), while properly balancing privacy concerns (section 14). It establishes important precedent on the appealability of interlocutory orders under the Superior Courts Act and the role of amici curiae in adducing evidence.