Itzikowitz v Absa Bank Ltd (20729/2014) [2016] ZASCA 43; 2016 (4) SA 432 (SCA) (31 March 2016)

Itzikowitz v Absa Bank Ltd (20729/2014) [2016] ZASCA 43; 2016 (4) SA 432 (SCA) (31 March 2016)

The Supreme Court of Appeal held that the appellant's counterclaim A, seeking recovery for pure economic loss reflecting the diminution in the value of his shareholding, was misconceived. The loss alleged was suffered by AMU, and the appellant, as a shareholder thrice removed, had no personal claim against Absa for wrongs committed against the company. The court reaffirmed the principle that a shareholder cannot recover for reflective loss, and that only the company may sue for loss suffered by it. The court found no facts pleaded to establish a separate and independent duty owed by Absa to the appellant. The appeal against the upholding of the exception to counterclaim A was dismissed....

Citation
[2016] ZASCA 43
Parties
Appellant: Gary Itzikowitz; Respondent: Absa Bank Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
31 March 2016
Case Number
20729/2014
Procedural Posture
Civil Appeal / Appeal and Cross Appeal From Exceptions to Counterclaims in First Instance
Outcome
Appeal dismissed; cross-appeal struck from the roll; costs awarded against appellant and cross-appellant.
Judges
Ponnan, Cachalia, Willis, Saldulker, Fourie
Legal Topics
Pure Economic Loss, Shareholder Claims, Reflective Loss, Wrongfulness, Company Separate Personality
Delict Commercial and Corporate Pure Economic Loss Shareholder Claims Reflective Loss Wrongfulness Company Separate Personality

Case Brief

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Parties

Gary Itzikowitz

Appellant

Absa Bank Limited

Respondent

Procedural Posture

Civil Appeal / Appeal and Cross Appeal From Exceptions to Counterclaims in First Instance

Legal Issues

  1. 1 Whether a shareholder may recover for pure economic loss reflecting diminution in share value caused by wrongs committed against the company.
  2. 2 Whether the appellant, as a shareholder thrice removed, has a personal claim against the respondent for alleged wrongful conduct towards the company.
  3. 3 Whether the dismissal of an exception is appealable.

Ratio Decidendi

The Supreme Court of Appeal held that the appellant's counterclaim A, seeking recovery for pure economic loss reflecting the diminution in the value of his shareholding, was misconceived. The loss alleged was suffered by AMU, and the appellant, as a shareholder thrice removed, had no personal claim against Absa for wrongs committed against the company. The court reaffirmed the principle that a shareholder cannot recover for reflective loss, and that only the company may sue for loss suffered by it. The court found no facts pleaded to establish a separate and independent duty owed by Absa to the appellant. The appeal against the upholding of the exception to counterclaim A was dismissed....

Court Disposition

Appeal dismissed; cross-appeal struck from the roll; costs awarded against appellant and cross-appellant.

Orders

  • The appellant is afforded 15 days to deliver a notice to amend counterclaim A, if so advised.
  • The appeal is dismissed with costs.