The Supreme Court of Appeal settled the debate surrounding the interpretation and relationship between s56(c) of the Mineral and Petroleum Resources Development Act 2002 and s73(6A) of the Companies Act 1973 by declaring that a right which has lapsed due to the deregistration of the company which is the holder of the right is revived when that company’s registration is restored.

In terms of section 56(c) of the MPRDA an existing right lapses when the company that holds the right is deregistered. Section 73(6A) of the old Companies Act empowers the Registrar, in appropriate circumstances, to restore the registration of a company.

In finding for the appellant, which was a company that sought to have its prospecting right retrospectively revived in accordance with sections 56(c) and 73(6A), the court referred to its judgment in Newlands Surgical Clinic (Pty) Ltd v Peninsula Eye Clinic (Pty) Ltd, which dealt with the effect of a company reinstatement in terms of s82(4) of the Companies Act 2008. Section 82(4) empowers any interested person to apply for the reinstatement of a company’s registration. In finding that s82(4) has automatic retrospective effect, the court went one step further and held that the provision not only revests the company with its property but also validates its corporate activities during the period of its deregistration.

The court held that the deeming provision in s73(6A) effectively means that upon restoration:

  1. all the company’s corporate activities are retrospectively validated as if the company was never deregistered; and
  2. all the company’s assets and rights revest in the company.

The court declared that the appellant’s prospecting right was retrospectively restored to it by virtue of the restoration of the company’s registration.

People who try to take advantage of the deregistration of a company may lose everything they hoped to gain if the company is re-registered.

The matter is Palala Resources v Minister of Mineral Resources and Energy.