McCrae v Absa Bank Limited (08/42229) [2009] ZAGPJHC 7 (7 April 2009)

McCrae v Absa Bank Limited (08/42229) [2009] ZAGPJHC 7 (7 April 2009)

The court held that the rule against double recovery, as articulated in Foss v Harbottle, is not absolute and must be applied in accordance with the interests of justice. In this case, the plaintiff is either the sole or a substantial shareholder in four private companies that have been finally liquidated, and the liquidators have not instituted proceedings against the defendant bank. The court found that there is no risk of double recovery or double jeopardy to the defendant, nor any opportunity for the plaintiff to recover twice. The plaintiff has pleaded a personal duty of care owed by the defendant bank to him, and the allegations must be accepted as true for the purposes of the...

Citation
[2009] ZAGPJHC 7
Parties
Plaintiff: Gordon Andrew McCrae; Defendant: Absa Bank Limited
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
7 April 2009
Case Number
08/42229
Procedural Posture
Civil Procedure / Exception to Particulars of Claim
Outcome
Exception dismissed with costs.
Judges
Satchwell
Legal Topics
Foss V Harbottle Rule, Double Recovery, Duty of Care, Shareholder Claims, Liquidation, Personal Delictual Claim
Civil Procedure Commercial and Corporate Delict Foss V Harbottle Rule Double Recovery Duty of Care Shareholder Claims Liquidation +1 more

Case Brief

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Parties

Gordon Andrew McCrae

Plaintiff

Absa Bank Limited

Defendant

Procedural Posture

Civil Procedure / Exception to Particulars of Claim

Legal Issues

  1. 1 Whether a shareholder may institute a personal delictual claim against a third party for diminution in share value caused by harm to the company.
  2. 2 Whether the rule against double recovery (Foss v Harbottle) precludes the plaintiff's claim.
  3. 3 Whether exceptions to the rule against double recovery apply in the circumstances of this case.

Ratio Decidendi

The court held that the rule against double recovery, as articulated in Foss v Harbottle, is not absolute and must be applied in accordance with the interests of justice. In this case, the plaintiff is either the sole or a substantial shareholder in four private companies that have been finally liquidated, and the liquidators have not instituted proceedings against the defendant bank. The court found that there is no risk of double recovery or double jeopardy to the defendant, nor any opportunity for the plaintiff to recover twice. The plaintiff has pleaded a personal duty of care owed by the defendant bank to him, and the allegations must be accepted as true for the purposes of the...

Court Disposition

Exception dismissed with costs.

Orders

  • The exception to plaintiff’s particulars of claim is dismissed.
  • The defendant shall pay the costs including those attendant upon the employment of two counsel.