Where does a Company Reside and Why does it Matter?

The provision that the court has jurisdiction ‘over all persons residing or being in such area does not enlarge the jurisdiction endowed by the words ’causes arising’. At common law, however, the residence (but not the mere physical presence) of a defendant or respondent within the court’s area of jurisdiction usually enables one to say that the cause ‘arises’ within the court’s area of jurisdiction. For purposes of section 21(1) of the Superior Courts Act 10 of 2013 as amended, the question whether a cause ‘arises’ within a court’s area of jurisdiction is determined by common law.

 

In Mfwethu Investments CC t/a Recharger Prepaid Meters v Citiq Meter Solutions (Pty) Ltd t/a Citiq Prepaid (13124/19) [2020] ZAWCHC 40, facts were as follows:

 

Recharger is a South African close corporation with its principal place of business in Durban. Citiq is a South African company. It has a place of business in Cape Town and another in Midrand, Gauteng. The Midrand office is its registered office in terms of s 23(3)(b) of the Companies Act 71 of 2008  as amended.

 

Physical presence versus residence in the context of a company

 

Merely because Recharger’s office in Cape Town causes it to be physically present within the court’s territory, the argument was found to be unsound and was rejected. The court will only have jurisdiction – or to put it differently, the cause at issue in the present case could only be said to be one arising within this court’s territory, i.e. if Citiq resides in this court’s territory.

 

Apleni v African Process Solutions (Pty) Ltd & another [2018] ZAWCHC 160 is the authority for the trite proposition that in a delictual claim the court will have authority over a defendant who is resident in its area, even though the delict was committed elsewhere. Since the delict in our case was not committed within this court’s area of jurisdiction, the question is whether Citiq is resident within this court’s territory.

 

The question whether a particular place is a company’s principal place of business in this sense is a factual matter which, if disputed, would involve evidence as to where the company’s general administration takes place.

 

Accordingly, in the absence of evidence about the activities carried on at the two offices, the prima facie position established by the registration has not been displaced. This address in Midrand was nominated some years after the 2008 Act came into force and must represent an endeavour to nominate, as the registered office, the company’s ‘principal office’ in South Africa. By law, this is where the company’s records, and particularly its financial records, must be located or accessible.

 

On this basis, the court found that it did not have jurisdiction because Citiq does not reside in its jurisdiction.

 

Conclusion

 

It is important for companies to know the difference between the physical presence and residence as this can be critical in enforcing its rights, especially considering questions of jurisdiction. Contact an expert at SchoemanLaw Inc today.

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