THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case No: 898/2020

In the matter between:

OPPRESSED A C S A MINORITY 1 (PTY) LTD
(Formerly known as African Harvest Strategic
Investments (Pty) Ltd)
FIRST APPELLANT

UP-FRONT INVESTMENTS 65 (PTY) LTD               SECOND APPELLANT

and

GOVERNMENT OF THE REPUBLIC OF
SOUTH AFRICA                                                          FIRST  RESPONDENT

MINISTER OF TRANSPORT                               SECOND RESPONDENT

AIRPORTS COMPANY OF SOUTH AFRICA
SOC LTD                                                                      THIRD RESPONDENT

PYBUS THIRTY-FOUR (PTY) LTD                    FOURTH RESPONDENT

AIRPORTS MANAGEMENT SHARE
INCENTIVE SCHEME COMPANY (PTY) LTD    FIFTH RESPONDENT

LEXSHELL 342 INVESTMENT HOLDINGS
(PTY) LTD                                                                    SIXTH RESPONDENT

TELLE INVESTMENTS (PTY) LTD                 SEVENTH RESPONDENT

ADR INTERNATIONAL AIRPORTS
SOUTH AFRICA (PTY) LTD                                EIGHTH RESPONDENT

G10 INVESTMENTS (PTY) LTD                             NINTH RESPONDENT

MINISTER OF FINANCE                                        TENTH RESPONDENT

Neutral citation: Oppressed A C S A Minority 1 (Pty) Ltd and Another v
Government of the Republic of South Africa and Others (case
no 898/2020) [2022] ZASCA 50 (11 April 2022)
Coram:
DAMBUZA, MAKGOKA, SCHIPPERS, PLASKET and
GORVEN JJA
Heard:

24 November 2021
Delivered:             This judgment was handed down electronically by circulation
to the parties' representatives by email, publication on the Supreme Court of
Appeal website and release to SAFLII. The date and time for hand-down is
deemed to be 10h00 on 11 April 2022.
Summary:         Civil Procedure – rescission of judgment – no distinction in
approach to rescission of consent orders and other judgments – the starting point
is the court order rather than the underlying agreement – lack of authority to
conclude settlement agreement and consequent consent court order – good cause
for rescission established.

ORDER

On appeal from: Gauteng Division of the High Court, Johannesburg (Yacoob J
sitting as court of first instance):
The appeal is dismissed with costs including the costs of two counsel.

JUDGMENT

Dambuza JA (Makgoka, Schippers, Plasket and Gorven JJA concurring)

Introduction
[1] This appeal is against an order granted by the Gauteng Division of the High
Court, Johannesburg (high court, Yacoob J), in terms of which a consent order
made by the same court, per Matojane J, was rescinded. The appeal is with the
leave of the high court.

Background
[2] The two appellants, Oppressed ACSA Minority 1 (Pty) Ltd (formerly
known as African Harvest Strategic Investments (Pty) Ltd) and Up-Front
Investments 65 (Pty) Ltd, are part of a 4.21%1 minority shareholder component
in Airports Company of South Africa (ACSA), the third respondent in this appeal.
ACSA is a statutory entity established by the first respondent, the Government of

1 ACSA was formed by the Government in 1993 to operate the nine main South African airports. In 1998 it was
partially privatised when 25.4% of its shareholding was sold to private sector shareholders. By 2015 the
Government held 74.6% shares and the balance was held as follows: ADR International Airports South Africa
(Pty) Ltd (a wholly owned subsidiary of the Public Investment Corporation (PIC) SOC Limited) held 20%, a staff
share incentive scheme (constituted by Amsis and Lexshell 342 Investment Holdings (Pty) Ltd) held 1.19%,
Minority Shareholders held 4.21% (formerly African Harvest Strategic Investments (Pty) Ltd) - 1.40% shares,
G10 Investments (Pty) Ltd – 1.21% shares, Upfront Investments 65 (Pty) Ltd – 0.40% shares, Pybus Thirty Four
(Pty) Ltd – 0.40% shares, and Telle Investments (Pty) Ltd – 0.80% shares).

the Republic of South Africa (the Government), in terms of the Airports Company
Act 44 of 1993 (Airports Act). The appellants acquired their share in 1998 at a
price of R172 million. The Government, holds 74.6% of the shares. The second
respondent (Minister of Transport) is the designated Government representative
on the ACSA Board.

[3] On 29 July 2015 the appellants brought an application in the high court
under s 163 of the Companies Act 71 of 2008 (Companies Act), seeking an order
directing ACSA to acquire their 1.8% stake in ACSA at fair value.2 The
application was a culmination of a longstanding dissatisfaction on the part of the
appellants with the business direction adopted by ACSA, subsequent to the
appellants’ acquisition of their shares. It was not in dispute that subsequent to the
appellants’ acquisition of their shares, ACSA had deviated from undertakings it
had made when the appellants acquired their shares. Instead of pursuing a public
offering (IPO) as promised and listing on the Johannesburg Stock Exchange
(JSE), ACSA adopted business practices that prioritized its economic
developmental role. In addition, the Government retained its shares in ACSA
instead of divesting of them as the appellants had been led to believe it would.

[4] In the s 163 application the appellants contended that ACSA’s deviation
from the promised commercial route resulted in their return on capital being
limited to the cost of their capital. At some stage ACSA also stopped declaring
dividends, leaving the appellants burdened with the debt they had assumed in
order to buy the shares, with no escape avenue.

2 In terms of s 163(1)(a) of this Act a shareholder or director of a company may apply to a court for relief if any
act or omission by the company, or related person, has had a result that is oppressive, or unfairly prejudicial to, or
that unfairly disregards the interests of the applicant. The same relief is available under s 163(1)(b) [where] the
business of the company, or a related person, is being or has been . . . conducted in a manner that is oppressive or
unfairly prejudicial to, or that unfairly disregards the interests of the applicant; or (under s 163(1)(c) [where] the
powers of a director or prescribed officer of the company, or a person related to the company, are being or have
been exercised [in a manner] that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests
of the applicant.

[5] While admitting that during June 1998 it had considered a public offering
of its shares as recorded in its prospectus, ACSA maintained that it could not be
held responsible for the appellants’ debts. It contended that there was never a time
limit for effecting the IPO, and that, in any event, the appellants had rejected an
offer to buy their shares at R12.87 per share. They never proved that the offer was
unreasonable and they never showed mala fides or unlawfulness in ACSA’s
developmental role. Instead, they were only prepared to sell their shares at R26.51
each, the value as per ACSA’s interim accounts for the six-month period ending
on 30 September 2014, so it was asserted.

[6] ACSA insisted that its Board of Directors had acted within its rights and
mandate in determining its business direction. And the appellants had not shown
any oppressive or prejudicial conduct on the part of ACSA and the Minister.
Therefore the appellants had not proved an entitlement to a relief based on s 163
of the Companies Act.

[7] ACSA, the Minister of Finance and the Government (State parties)
contended that the appellants did not specify when and by whom the decisions
not to list and not to pay dividends were taken, and whether they were executive
or administrative decisions. They pleaded that in acquiring the shares from the
appellants, ACSA would have to comply with the provisions of s 217 of the
Constitution and other procurement requirements prescribed in terms of the
Constitution. Furthermore, an order sought by the appellants, that an
internationally recognised expert be appointed to value their shares, would be
offensive to the provisions of the Public Finance Management Act 1 of 1999
(PFMA) and the Regulations promulgated thereunder.3

3 The specific sections of the PFMA which, it was alleged, would be contravened if the s 163 application were to
be granted, are set out in the paragraphs that follow.

[8] A few days before the date of the hearing of the s 163 application,
discussions were held between the appellants and ACSA’s representatives. These
resulted in a settlement agreement being concluded on 31 July 2017, the day
before the hearing.  On the day of the hearing, 1 August 2017, the high court, per
Matojane J, granted a consent order based on the settlement agreement. In the
relevant part the order read as follows:
‘NOW THEREFORE the parties agree to settle the dispute between them as set out hereunder.
1. The first respondent (“ACSA”):
1.1 is directed to purchase the shares of the applicants in ACSA;
1.2 is to take transfer thereof against payment to the applicants of a purchase consideration in
an amount to be determined by the referee referred to in paragraph 4 below;
1.3 purchase [sic] the applicants’ shares as a share buy-back out of ACSA’s retained income.
2. The value of the applicants’ shares in ACSA will be as at the date of this order.
3. In order to determine the value of the applicants’ shares in ACSA, the court refers this issue
to a referee as contemplated in terms of section 38 of the Superior Courts Act, No 10 of 2013
(“Superior Courts Act”).
4. The applicants and first respondent will appoint the referee within 14 days from date of this
order such referee to be:
4.1 an internationally recognised, independent merchant banker doing business in South Africa
with experience in the valuation of infrastructure businesses shall be appointed by agreement
between the parties (or failing such agreement by the chairperson for the time being of the
Banking Association of South Africa);
. . .

8. The referee’s costs shall be borne equally by the applicants on the one part, and ACSA, on
the other part.’

[9] The consent order was partially implemented. A referee was appointed
pursuant to the court order and a valuation was concluded on 26 February 2018.
ACSA, however, disputed the valuation and launched proceedings in the high
court to challenge it. On 17 July 2018, whilst the ACSA challenge to the valuation
was pending, and almost a year after the consent order was granted, the

Government launched an application in the high court seeking rescission of the
consent order and, in the alternative, leave to appeal against that order.

[10] The application for rescission of the consent order was brought in terms of
both rule 42(1) of the Uniform Rules of Court (the rules) and under common law.
It was contended that the consent order was erroneously granted as it was not
competent for the court to grant an order which bolstered an illegality. The
illegality was said to be the conclusion of a settlement agreement in breach of ss
3 and 4 of the Airports Act,4 and the provisions of paragraphs 9.5 and 9.6 of
ACSA’s Memorandum of Incorporation (MOI).5 The Government contended that
the Minister of Transport never gave approval to the share buy-back.
Furthermore, although the Government was the majority shareholder in ACSA,
it had not been party to the settlement agreement, yet it found itself bound thereby
whilst it could not discharge its obligations to protect public funds.

[11] In addition, so contended the Government, the settlement agreement was
concluded in breach of ss 54(2)(c) and 66 of the PFMA. Section 54(2)(c) of the
PFMA imposes an obligation on accounting authorities of public entities
intending to acquire or dispose of a ‘significant shareholding’ in the company to
inform National Treasury of the impending transaction and to submit particulars

4 Section 3 of that Act provides:
‘(1) The State shall be the holder of the shares in the company; (2) The said shares shall only be sold or otherwise
disposed of with the approval, by resolution, of Parliament; (3) The rights attached to the shares of which the State
is the holder shall be exercised by the Shareholding Minister on behalf of the State; (4) The State President shall
designate a Minister as the Shareholding Minister.’
Section 4 provides that:
‘the objects of the company are the acquisition, establishment, development, provision, maintenance,
management, control or operation of any airport, any part of any airport or any facility or service at any airport
normally related to the functioning of, an airport.’
5 The relevant provisions of the MOI provide that:
‘9.5 In addition to any prescribed obligations which the Shareholders may agree to and notwithstanding any
provisions of this MOI, no Securities in the Company held by any other Holder, other than the Minister, shall be
transferred to any party without the consent of the Minister.
9.6 Where the Minister consents to the sale or disposal or transfer of securities in the manner contemplated in
clause 9.5 above, the Minister shall be entitled , at his or her discretion, to stipulate any conditions which shall
apply to the granting of the consent.’

relevant to the transaction to ‘their executive authorities’.6 The Goverment
maintained that the share buy-back transaction fell within the ambit of this
section, yet no report to National Treasury was made prior to the conclusion of
the agreement. The appellants retorted that there was no evidence that the share
buy-back amounted to a disposal of a significant shareholding in ACSA.

[12] Section 66 sets out restrictions on borrowing money, the issuing of
guarantees, indemnities and securities by public institutions to which the PFMA
is applicable.7 The contention by the Government was that in terms of the consent
order, ACSA had to buy the shares back at some undetermined time in the future.

[13] Another reason why it was contended that the consent order was an
illegality was that it was granted in the absence of a solvency and liquidity test
that is required under ss 46 and 48 of the Companies Act. There was no resolution
by the ACSA Board of Directors acknowledging that it was satisfied that the
solvency and liquidity requirements had been complied with. Sections 46(1)(a)
and (b) of the Companies Act regulate the making of distributions by companies.
In terms thereof distributions may only be made pursuant to an existing legal
obligation or on authorisation by the board. Further, distributions may only be

6 Section 54(2) provides:
‘Before a public entity concludes any of the following transactions, the accounting authority for the public entity
must promptly and in writing inform the relevant treasury of the transaction and submit relevant particulars of the
transaction to its executive authority for approval of the transaction:
. . .
(c) acquisition or disposal of a significant shareholding in a company. . .’.
7 Section 66, in relevant part, provides:
‘(1) An institution to which this Act applies may not borrow money or issue a guarantee, indemnity or security,
or enter into any other transaction that binds or may bind that institution or the Revenue Fund to any future
financial commitment, unless such borrowing, guarantee, indemnity, security or other transaction -
(a) is authorised by this Act; and
(b) in the case of public entities, is also authorised by other legislation not in conflict with this Act;
. . .
(3)  Public entities may only through the following persons borrow money, or issue a guarantee, indemnity or
security, or enter into any other transaction that binds or may bind that public entity to any future financial
commitment:
(a) A public entity listed in Schedule 2: The accounting authority for that Schedule 2 public entity. . .’.

made when it reasonably appears that the company will satisfy a solvency and
liquidity test immediately after completion of the proposed distribution.

[14] The high court found that the requirements of rule 42 had not been met. It
rejected the Government’s argument that the absence of authority for the
conclusion of the settlement agreement by ACSA constituted justus error.
Instead, the court accepted a submission by the Government that the court order
fell to be rescinded on just and equitable grounds by exercise of the court’s
remedial powers under s 172(1)(b) of the Constitution, because the settlement
agreement and the consent order contravened the provisions of s 66 of the PFMA
and were therefore unlawful.

[15] Although ACSA had filed a notice to abide to the decision of the high court
in the application for rescission of judgment, it filed an explanatory affidavit and
also made written and oral submissions, essentially supporting the application for
rescission. It also opposed the appellants’ application for leave to appeal, and
again filed Heads of Argument, and made oral submissions opposing the appeal.
To a large extent the submissions made on behalf of the State parties in opposing
the appeal overlapped.

[16] On appeal the appellants asserted that the Government lacked standing to
bring the rescission application because the consent order was only granted
against ACSA. It was submitted on the appellants’ behalf that the Government
had no legal interest in the share buy-back transaction as it could not be held liable
for the payment of the price of the shares. Furthermore, the unlawfulness or
illegality of the court order was not a proper basis for rescission of the consent
order and it was not competent to rescind a court order under s 172(1)(b) read
with s 173 of the Constitution. Instead, it was submitted, the Government should
have brought an application for the review of the decision to conclude the

settlement agreement. The appellants also contended that the high court erred in
concluding that the settlement agreement was never authorised by the ACSA
Board.

[17] The Government persisted in its argument that because the settlement
agreement was not in compliance with the law, a proper basis for rescission of
the consent order had been established. It insisted in its contention that rescission
was permissible on the common law ground of justus error because ACSA’s legal
representatives and officials had no authority to conclude the settlement
agreement. It highlighted that both this Court and the Constitutional Court have
emphasised that courts cannot perpetuate an illegality, and they have a
responsibility to scrutinise settlement agreements for legal compliance. The
violation of the provisions of the Companies Act and PFMA remained part of the
Government’s case on appeal.

[18] The appellants took issue with ACSA’s participation in the appeal. They
maintained that it was not open to ACSA, having withdrawn from active
participation in the case and having undertaken to accept whatever outcome the
court might give, to enter the fray on appeal as an ‘antagonist’. Their stance was
that the Government and ACSA should not be afforded audience in the appeal. It
is therefore necessary to determine first the standing of these parties in this appeal.

Government standing
[19] The enquiry is whether the Government has a direct and substantial interest
in the valuation and the share buy-back ordered by the high court. It is trite that a
party to litigation must have an actual and current interest in the subject matter
and the outcome of the litigation.8

8 Four Wheel Drive CC v Leshni Rattan NO [2018] ZASCA 124; 2019 (3) SA 451 (SCA) para 7.

[20] As discussed, the Government is the major shareholder in ACSA. In the
founding affidavit deposed to by Mr Alun Frost on behalf of the appellants in the
s 163 application,9 it was pleaded that the Minister of Transport was designated
by the President as the Government shareholder representative in ACSA. The
Government was instrumental in the establishment of ACSA and, by and large,
remains the force behind ACSA’s business policy. It is the custodian of the
public’s interest in ACSA. It therefore has the requisite direct and substantial
interest in ACSA. It must have been for these reasons that it was cited as a
respondent by the appellants in the s 163 application.

[21] For the same reasons the Government had a responsibility to participate in
the conclusion of the settlement agreement. The fact that on 1 August 2018 it
inexplicably abdicated its responsibility and formed the view (as communicated
by its counsel at the time) that it was not affected by the contents of the agreement
did not divest it of its legal interest.10 That legal interest still obtains in this appeal.

ACSA standing
[22] The appellants’ objection to ACSA’s participation in this appeal must also
fail. It is true that, having elected to abide by the order of the high court in the
application for rescission of the consent order, ACSA was barred, under the
doctrine of peremption, from mounting an appeal against the consent order.11 One
would therefore not have expected ACSA to present emphatic opposing
submissions as it did in opposition to the appeal. Curiously, in its explanatory
affidavit ACSA offered no explanation for its partial compliance with the consent
order over the period of almost a year following the granting thereof. Be that as

9 The application for the share buy–back under s 163(2) of the Companies Act.
10 When the parties moved for an order that the settlement agreement be made an order of court, counsel for the
government confirmed to Matojane J that as government’s legal team, they had consulted extensively with ‘[their]
clients’ with regard to the terms of the settlement agreement.  He further confirmed that the ‘clients’ were also in
attendance in court on the day.
11 Hlatshwayo v Mare & Deas 1912 AD 242 at 247.

it may, the doctrine of peremption is not absolute. Sometimes the interests of
justice will be served by the court electing not to enforce peremption.12 And when
confronted with the possible operation of the doctrine, the approach is to consider
whether any overriding policy considerations militate against the enforcement of
the doctrine.13

[23] Given the centrality of ACSA to the issues that had to be determined in this
appeal, its rather active participation was more likely to be beneficial to the
proceedings, even if to a limited extent, in giving insight into the issues relevant
for determination of the appeal. Furthermore, there had been no objection to the
affidavit and comprehensive Heads of Arguments filed on its behalf in the high
court in the rescission application and in its opposition to the application for leave
to appeal. For these reasons, this Court exercised its discretion in favour of
granting audience to ACSA in the appeal.

The appeal
[24] At common law a final judgment may be set aside for fraud, justus error
(in exceptional circumstances) and justa causa. The Government’s insistence that
it was entitled to have the judgment rescinded based on justus error is misplaced.
A party may escape liability under a contract where it can be shown that the denier
laboured under a mistake. That was not the case made out by the Government in
this case. The Government was not party to the settlement agreement. On the
other hand, the Government could have the consent order rescinded on just cause.
The inquiry requires that a good and sufficient cause be shown in accordance with
the principles applicable to rescission under rule 31(2)(b) of the rules.14 The
relevant factors include the reasonableness of the explanation of the

12 Booi v Amathole District Municipality and Others (CCT 119 of 2020) [2021] ZACC 36; 2022 (3) BCLR 265
(CC) at para 31.
13 Booi  para 29.
14 D E Van Loggerenberg et al Erasmus: Superior Court Practice 2 ed (2015) at B1–308.

circumstances in which the consent judgment was given, and the bona fides of
the application, including the bona fides of the defence on the merits of the case.
The court has a wide discretion in evaluating ‘good cause’ in order to ensure that
justice is done.15

[25] It is not necessary to discuss in great detail each of the plethora of statutory
and other alleged infringements raised by the Government and ACSA in relation
to the conclusion of the settlement agreement and the granting of the consent
order. The arguments based on ss 54(2)(c) and 66(1) of the PFMA and s 163 of
the Companies Act may immediately be discounted. As it was submitted on
behalf of the appellants, the evidence did not show that their shares amounted to
a ‘significant shareholding’ in ACSA. In addition, it is relevant that the high court
ordered that the buy-back would be financed from ACSA’s retained income.

[26] Consequently, the argument by the respondents that the order authorised
the buy-back at some indeterminate time in the future was not persuasive. If the
buy-back price as determined in the referee’s evaluation could not be paid out of
the retained income, the buy-back could not be implemented in terms of the court
order. Furthermore the need to satisfy the requirements of s 163 of the Companies
Act was superseded by the settlement agreement (subject, of course, to its validity
in other respects). The settlement would have been pointless if the requirements
of s 163 still had to be met.

[27] However, although the Government did not explain its counsel’s
submissions in court in relation to the settlement agreement, its arguments on lack
of authority for the conclusion of the settlement agreement and the consent order
were more persuasive in support of a bona fide defence justifying rescission of

15 Ibid fn 14 at B1- 204.

the judgment. In Moraitis Investments (Pty) Ltd and Others v Montic Dairy (Pty)
Ltd and Others,16 this Court highlighted that in determining whether a consent
order falls to be rescinded the correct starting point is the order itself rather than
the underlying settlement agreement. Where the basis of the attack on the
judgment is lack of authority to conclude the underlying agreement (as it is in this
case), the principle that comes into play is that no agreement came into
existence.17 Essentially, this is the respondents’ argument in this case.

[28] The crux of the Government’s submission was that ACSA’s officials and
representatives lacked the authority to conclude the settlement agreement. It was
not in dispute that until the ACSA Board passed the necessary resolution, neither
the settlement agreement nor the consent order would be lawful. It was also not
in dispute that the Minister’s approval was necessary for the buy-back agreement
to be valid.

[29] A recounting of the uncontested background to the conclusion of the
settlement agreement is necessary for consideration of the consent issue. Until
the few days preceding the date of hearing of the s 163 application, ACSA and
the appellants were destined for a full hearing on 1 August 2017 on all the issues
raised in that application. On 27 and 28 July 2017 pre-hearing discussions
commenced between the parties’ legal representatives.18 On 27 July 2017,
proposed terms for a possible settlement were presented to the ACSA Board by
its lawyers. The Board resolved that more time was required to consider the
proposal and to consult the Minister before making ‘any commitment’. That was
the last word from the ACSA Board on possible settlement.

16 Moraitis Investments (Pty) Ltd and Others v Montic Dairy (Pty) Ltd and Others [2017] ZASCA 54; [2017] 3
All SA 485 (SCA); 2017 (5) SA 508 (SCA) at para 10.
17 Ibid fn 16 para 17.
18 Between ACSA, the Minorities and the Government.

[30] On 31 July 2017 a further meeting to discuss the possibility of a settlement
was held between the legal representatives of the respective parties. Also in
attendance at that meeting were ACSA’s Chief Executive Officer, the Head of its
Legal Department, its Company Secretary, Mr. Frost (for the appellants) and
various other persons. On that day a proposed draft order was exchanged and
discussed between the legal representatives and the parties’ representatives.19 By
the end of the meeting it appeared that everyone in attendance at the meeting was
satisfied that a court order based on a proposed settlement agreement would be
sought on the following day. Matojane J, the judge to whom the matter had been
allocated, was advised accordingly in preparation for the next day. The settlement
agreement was signed by the legal representatives of ACSA and the appellants.

[31] The next morning, however, ACSA’s legal representatives advised the
court that they had been instructed to seek a postponement of the application.
When the request for a postponement was refused, ACSA’s senior counsel
withdrew from the proceedings, leaving only junior counsel to continue with the
matter. Thereafter, submissions were made on some contentious portions of the
settlement agreement. Ultimately a consensus was reached on all the terms of the
consent order. Counsel for the Government indicated that the Government had
not been party to the discussions which led to the settlement agreement, but had
been given a copy thereof which was duly considered by the relevant Government
functionaries. He expressed the view that the Government was ‘not affected’ by
the terms of the agreement. The consent order was then granted in that context.

[32] From these facts, it was clearly established that the ACSA Board never
passed a resolution adopting the settlement agreement. The factual finding by the
high court to this effect cannot be faulted. The Minister also never consented to

19 The contested issues were the inclusion of a reference to s 163 of the Companies Act 2008 in the preamble of
the proposed order and a reference to oppressive conduct in relation to the contemplated valuation exercise.

the settlement agreement. Much was made by the appellants of ACSA’s conduct
in compliance with the court order. They highlighted ACSA’s active participation
in the steps taken to implement the court order over the seven months following
the granting thereof. It was submitted that even if no resolution was ever taken
by the Board on the agreement, ACSA, through its conduct, ratified the settlement
agreement and was estopped from relying on lack of authority. As proof thereof,
in the answering affidavit, Mr Frost referred to correspondence between himself
and ACSA’s secretary relating to the appointment of the referee who was to do
the valuation as provided in the consent order. He also highlighted that copies of
the correspondence were sent to the Chairman of the ACSA Board together with
the Chief Executive Officer (CEO) and Acting Chief Financial Officer (CFO),
and that the latter signed the referee’s terms of engagement, where after ACSA
paid the R650 000.00 which was its share of the referee’s fees.

[33] However, as correctly submitted on behalf of the Minister, compliance
with the authorisation requirements was a fundamental necessity for consent to
an order in the terms proposed in the settlement agreement. Neither ACSA’s legal
representatives nor its Board Chairman, CEO or CFO, either individually or
together had the authority to give such consent. And the unauthorised agreement
could not be legitimised through a court order.20  The submissions on behalf of
the appellants that they were entitled to rely on some authority, ‘whether actual
or ostensible’, by ACSA’s ‘representatives’ and legal representatives who
consented to the order, was unsustainable. There could be no basis for ostensible
authority, when, on the day of the hearing of the s 163 application, ACSA’s legal
representatives said that they had been instructed to seek a postponement.

20 Eke v Parsons  [2015] ZACC 30, 2016 (3) SA 37 (CC), 2015 (11) BCLR 1319 (CC); Valor IT v Premier, North
West Province and Others [2020] ZASCA 62, [2020] 3 All SA 397 (SCA), 2021 (1) SA 42 (SCA); Road Traffic
Management Corporation v Waymark Infotech (Pty) Limited [2019] ZACC 12, 2019 (6) BCLR 749 (CC), 2019
(5) SA 29 CC.

[34] Similarly, the reference to a special resolution adopted by ACSA’s
shareholders at its 22nd Annual General Meeting in 2015 authorising the buy-back
of ACSA’s shares did not assist the appellants. Neither could the argument that
the Minister of Transport was represented at the negotiations and the court
proceedings that culminated in the consent order on 1 August 2017. The 2015
resolution preceded the s 163 application. The only relevant resolution adopted
by ACSA’s Board in relation to the pending application was the one passed on
27 July 2017 in which the Board resolved that it needed more time to consider
the settlement proposal. That resolution set out clearly that the Board’s attitude
was that it was not amenable to settlement on those terms at that time and it
directed that the Minister’s opinion be sought on the matter. The conduct of
ACSA’s legal representatives in applying for a postponement on the date of the
hearing of the main application was consistent with that resolution.

[35] The appellants’ ratification argument was equally doomed to fail. ACSA’s
principal was its board of directors. No conduct by the Chairman of the Board,
acting on his own, could constitute ratification. Nor could the conduct by ACSA’s
CEO or its CFO constitute ratification of the unauthorised agreement. Conduct
by these ACSA representatives, whether at the conclusion of the contract or
subsequent thereto, was irrelevant to the determination of validity of settlement
agreement and the consent order.

[36] There was also no proper basis to support the estoppel argument. No
conduct on the part of the ACSA’s Board could be understood to invest its legal
representatives, Chairman, the CEO or the CFO with authority to consent to the
agreement. There was no evidence that the share buy-back was a matter that
normally fell within the scope of those representatives. In any event it was not the
appellants’ case that they were led to believe that the necessary resolution had
been passed by the Board.

[37] The appeal is dismissed with costs, including the costs of two counsel.

________________

N DAMBUZA

JUDGE OF APPEAL

Appearances:

For appellants:

J Gauntlett SC with N Luthuli
Instructed by:

Falcon & Hume Inc, Sandton

Webbers, Bloemfontein

For 1st and 2nd respondents:
G Marcus SC with A Hassim SC
Instructed by:

State Attorney, Johannesburg

State Attorney, Bloemfontein

For 3rd respondent:
S Budlender SC with P Ngcongo
Instructed by:                                                Edward Nathan Sonnenbergs Inc,
Sandton

Honey Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OFSOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED

FROM
The Registrar, Supreme Court of Appeal

DATE
11 April 2022

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form part of
the judgment.

Oppressed A C S A Minority 1 (Pty) Ltd and Another v Government of the Republic
of South Africa and Others (case no 898/2020) [2022] ZASCA 50 (11 April 2022)

MEDIA STATEMENT

Today the Supreme Court of Appeal dismissed an appeal against an order granted by
the Gauteng Division of the High Court, Johannesburg, in terms of which a consent
order made by the same court was rescinded. The rescinded court order was granted
by the high court following an agreement concluded between the Oppressed ACSA
Minority 1 (Pty) Ltd together with Up-Front Investments 65 (Pty) Ltd on one hand, and
the Airports Company of South Africa on the other hand. The Oppressed Minority and
Upfront Investments are minority shareholders in ACSA and the Government is a
majority shareholder.

The court order in terms of which ACSA was ordered to buy back the shares owned
by the two minority shareholders was granted with the consent of these parties. The
Oppressed Minority parties had brought an application in the high court during 2015
under s 163 of the Companies Act 71 of 2008 seeking an order directing ACSA to
acquire their 1.8% stake in ACSA at fair value. The application was a culmination of a
longstanding dissatisfaction on the part of the Oppressed Minorities with a
developmental business strategy adopted by ACSA, subsequent to their acquisition of
their shares.

A few days before the hearing of the application, in July 2017, settlement discussions
were held between the Oppressed Minorities’ and ACSA’s representatives, leading to
the conclusion of a settlement agreement. The terms of the settlement agreement
were then made an order of court on 1 August 2017 with the consent of the three
parties.  The consent order directed that a referee be appointed to value the shares
held by the Oppressed Minorities and that ACSA implement the share buy-back. After
the valuation was concluded, ACSA launched proceedings in the high court to
challenge the valuation.

Whilst ACSA’s challenge to the valuation was pending, the Government approached
the high court seeking rescission of the consent order on the basis that it was
erroneously granted.  The argument was that neither the Minister of Transport, who
represented the Government on the ACSA Board, nor ACSA’s Board of Directors
approved the settlement agreement as prescribed in the Public Finance Management
Act 1 of 1999, the Airports Company Act 44 of 1993 and ACSA’s Memorandum of
Incorporation. Therefore it was not competent for the court to grant an order which
was an illegality.

The high court granted the rescission application on the basis that it was just and
equitable to do so, as the settlement agreement and the consent order contravened
section 66 of the PFMA. In dismissing the appeal by the Oppressed Minorities, the
SCA rejected their argument that ACSA and the Government had no legal standing in
the appeal.  The SCA found that, as the majority shareholder in ACSA and the
custodian of the public’s interest in ACSA, the Government had the requisite direct
and substantial interest in it. The court also held that although ACSA had undertaken
to abide by the judgment of the court in the appeal, submissions could be made on its
behalf as it was central to the issues under consideration. The SCA then held that the
evidence showed that the ACSA Board never passed a resolution adopting the
settlement agreement and the Minister never consented to the agreement. Further,
ACSA’s office bearers and legal representatives who concluded the settlement
agreement, lacked the necessary authority to do so.
--- ends --