A Reflection on the Interpretation Germane to an “Act or Omission” or “Course of Conduct or Continued Practice” in terms of the 2008 Companies Act: A Critical Analysis of Singh v The CIPC
- Nelson R Mandela School of Law, University of Fort Hare
In the case of Singh v The Companies and Intellectual Property Commission  ZASCA 69, the Supreme Court of Appeal’s interpretation of the provisions regulating whether “course of conduct” or “continued practice” (which was unlawful, and could prescribe), gave direction. The court also made a ruling regarding the functions of the Companies and Intellectual Property Commission (the Commission). This case is significant, because it provides clarity about the interpretation and application of the provisions of section 219(1)(a) and (b) of the 2008 Act relating to the accountability of companies and their directors. The aim of this article is to analyse the findings and the basis upon which the court a quo and the Supreme Court of Appeal came to their conclusions and how the phrases “act or omission”, “course of conduct” and “continued practice” should be interpreted and applied in terms of section 219(1). The conclusion is that both the Supreme Court of Appeal and the court a quo erred in the interpretation and application of the provisions of section 219(1). Davis AJA’s decision cannot be supported in so far as he ruled that section 219(1)(b) of the 2008 Act was not applicable. It appears that Basson J was correct to rule that section 219(1)(b) was applicable. However, Basson J erred by not initially interpreting the provisions of section 219(1)(a) and rather commencing with section 219(1)(b). Davis AJA, on the other hand, erred when, after establishing that section 219(1)(a) was applicable, did not continue to interpret section 219(1)(b) to address the complaint by Ralston Smith, and determine whether the wrongful/fraudulent entry did infringe upon the rights of Smith.
Keywords: Course of conduct; Continuing practice; Company law; Corporate law; Duties of directors; Corporate governance; act or omission.