Absa Bank Limited v Cohen (32870/12) [2014] ZAGPJHC 250 (3 June 2014)

Absa Bank Limited v Cohen (32870/12) [2014] ZAGPJHC 250 (3 June 2014)

The court held that the alleged contradiction in the defendant's counterclaim was not material and did not render the pleading vague or embarrassing. The claim was based on New City's shareholding in QPG, which in turn held shares in AMU, and there was no contradiction in the relevant paragraphs. Regarding the second ground of exception, the court accepted that, for the purposes of the exception, all factual allegations pleaded by the defendant must be taken as true. The court acknowledged the well-established company law principle that only the company may sue for harm done to it, and shareholders generally have no right to claim for diminution in share value. However, the court found...

Citation
[2014] ZAGPJHC 250
Parties
Plaintiff: Absa Bank Limited; Defendant: Chaim Cohen
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
3 June 2014
Case Number
32870/12
Procedural Posture
Civil Procedure / Exception to Counterclaim
Outcome
Exception dismissed; costs reserved for the trial court.
Judges
Weiner
Legal Topics
Company Law Shareholder Claims, Duty of Care, Exception Procedure, Multiplicity of Actions, Aquilian Action Extension, Policy Considerations
Civil Procedure Commercial and Corporate Delict Company Law Shareholder Claims Duty of Care Exception Procedure Multiplicity of Actions Aquilian Action Extension +1 more

Case Brief

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Parties

Absa Bank Limited

Plaintiff

Chaim Cohen

Defendant

Procedural Posture

Civil Procedure / Exception to Counterclaim

Legal Issues

  1. 1 Whether the defendant's counterclaim is vague and embarrassing due to a contradiction in the pleaded relationship between the parties.
  2. 2 Whether the counterclaim discloses a cause of action in law for a shareholder of a shareholder to claim against a third party for diminution in share value.
  3. 3 Whether policy considerations, including indeterminate liability and multiplicity of claims, preclude the extension of delictual liability in these circumstances.

Ratio Decidendi

The court held that the alleged contradiction in the defendant's counterclaim was not material and did not render the pleading vague or embarrassing. The claim was based on New City's shareholding in QPG, which in turn held shares in AMU, and there was no contradiction in the relevant paragraphs. Regarding the second ground of exception, the court accepted that, for the purposes of the exception, all factual allegations pleaded by the defendant must be taken as true. The court acknowledged the well-established company law principle that only the company may sue for harm done to it, and shareholders generally have no right to claim for diminution in share value. However, the court found...

Court Disposition

Exception dismissed; costs reserved for the trial court.

Orders

  • The exception is dismissed.
  • Costs are reserved for the trial court.