Abstract
This article focuses on an Australian piece of legislation and interesting case law, as well as how the Federal Court of Australia has applied Australia’s Corporations Act 2001, to characterise a person as a de facto director – that is, as a professed director whose appointment as such was defective. In this regard, the decisions of that Court will, as envisaged in the Constitution of the Republic of South Africa 1996, constitute persuasive authority. The Australian decision to be discussed in this article is significant in that the South African Companies Act 71 of 2008 does not contain substantively similar provisions to those of Australia’s Corporations Act 2001. For example, section 66(7) of the Companies Act 2008, contains the phrase “entitled to serve” as a director. This article explains the legal implications relevant to that expression, including whether it imposes a statutory condition precedent. This article also considers the validity of decisions taken by a person who is not “entitled to serve” as a director.
Highlights
Significant changes to the Companies Act 71 of 2008 were made by excluding relevant sections of the Companies Act 61 of 1973
This article focusses on an Australian piece of legislation and interesting case law, as well as on how the Federal Court of Australia has applied Australia's Corporations Act, 2001 to characterise a person as a de facto director – that is, as a professed director whose appointment as such was defective
The Australian decision to be discussed in this article is significant in that the South African Companies Act 71 of 2008 does not contain substantively similar provisions to those of Australia's Corporations Act 2001
Summary
Significant changes to the Companies Act 71 of 2008 were made by excluding relevant sections of the Companies Act 61 of 1973. A dispute arose as to whether the appointment could be terminated by Multichoice on 9 April 2019, bearing in mind the fact that the appointment was defective.2 To answer these questions, this article refers to an Australian case and to how the Federal Court of Australia applied the Corporations Act, 2001, where a de facto director acted as if he were a de jure director.. In the 2008 Act it would appear that section 66(1) could provide for a similar section 214 provision by regulating defective appointments and the validity of de facto directors' actions/decisions in the memorandum of incorporation..
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