The High Court has ruled that trustees of the Meadowvale Pension Scheme continue to hold a 30% shareholding in a South African company, after finding that neither an attempted transfer nor the scheme’s 2011 wind-up validly transferred or disposed of the shares.
In a judgment delivered on 23 March 2023, Ms Justice Eileen Roberts answered in the affirmative the question of whether the shares acquired by the scheme in African Gateway Convention and Exhibition Precinct Proprietary Limited remained vested in its trustees. The court did not determine the form of the order or legal costs; it listed the matter for mention on 18 April 2023 to hear the parties on those issues.
The trustees had issued a special summons in March 2020 seeking the court’s determination of questions concerning the shareholding. At the hearing, they accepted that the attempted transfer to Davycrest Nominees was ineffective because they had not given the required written notice to the company or obtained the other shareholders’ consent. The court therefore answered the first agreed question—whether the trustees had effectually divested themselves of the shares—in the negative.
The scheme acquired the 30% holding in 2005, and it was registered as proprietor of 30 ordinary shares in January 2007. In August 2011, the trustees executed a deed of assignment to Davycrest Nominees and a deed purporting to wind up the scheme. The wind-up deed proceeded on the assumption that all scheme assets had been disposed of, but the shares had remained with the trustees.
The trustees argued that the trust continued because they had never validly parted with the shares. The company, joined as a notice party, argued that the scheme had been dissolved and that any remaining property could potentially be held on resulting trust or become bona vacantia, property belonging to the state. The judge noted that Revenue had continued to treat the scheme as ongoing, but said that its position on split transfers was not itself a legal finding that the wind-up deed was ineffective.
The judge concluded that the wind-up deed did not terminate the scheme: it neither transferred the shares nor provided for remaining trust assets. She found the shares remained subject to the same trust under which they had always been held, rather than constituting a surplus after distribution. The court’s ruling concerned the trustees’ continued holding of the shares; it did not settle the form of the order or costs.