South Africa Case Law

Pathways Holdings (Pty) Ltd v Skyfi Internet Solutions (Pty) Ltd and Others (32429/2021)

Pathways Holdings (Pty) Ltd v Skyfi Internet Solutions (Pty) Ltd and Others (32429/2021) [2022] ZAGPPHC 45 (21 January 2022)

Court

North Gauteng High Court, Pretoria

Case number

32429/2021

Judge

Mbongwe

The applicant failed to establish locus standi as it did not prove direct shareholding in the first respondent, nor did it rebut the respondents' evidence regarding its lack of interest. The applicant's cause of action was unfounded, as it sought damages for reflective loss, which is not permissible; only the company may claim for wrongs done to it. The requirements for an Anton Piller order were not met, as the applicant did not have an existing cause of action and sought the order to scout for a claim rather than preserve vital evidence. The respondents provided cogent proof of the legitima…

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• Anton Piller Order
• Locus Standi
• Shareholder Claims
• Reflective Loss
• Urgent Interdict
• Company Director Liability

De Bruyn v Steinhoff International Holdings N.V. and Others (29290/2018)

De Bruyn v Steinhoff International Holdings N.V. and Others (29290/2018) [2020] ZAGPJHC 145; 2022 (1) SA 442 (GJ) (26 June 2020)

Court

South Gauteng High Court, Johannesburg

Case number

29290/2018

Judge

Unterhalter

The court found that the applicant's proposed class action did not raise a triable issue in law. Under South African company law, directors' fiduciary duties and auditors' statutory duties are owed to the company, not to shareholders, except in special circumstances not pleaded here. The common law does not recognize a direct claim by shareholders for pure economic loss resulting from misstatements in financial statements or audit reports. Statutory claims under the Companies Act, including sections 218(2) and 20(6), do not confer a right of action on shareholders for their own losses in thes…

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• Class Action Certification
• Shareholder Claims
• Directors Liability
• Auditor Liability
• Companies Act Interpretation
• Reflective Loss

London and Others v Department of Transport, Roads and Public Works, Northern Cape and Others (1035/2018)

London and Others v Department of Transport, Roads and Public Works, Northern Cape and Others (1035/2018) [2019] ZASCA 144 (30 October 2019)

Court

Supreme Court of Appeal

Case number

1035/2018

Judges

Petse, Cachalia, Tshiqi, Mokgohloa, Tsoka

The Supreme Court of Appeal held that the appellants' particulars of claim did not disclose a cause of action. The court found that the loss alleged by the appellants was not separate and distinct from the loss suffered by Canton Trading 159 (Pty) Ltd, and there was no allegation of a breach of a legal duty independently owed to the shareholders by the Department. The contractual relationship and any duty arising from it existed between the Department and Canton, not the shareholders. The court further held that the High Court's earlier judgment had only determined locus standi and non-joinde…

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• Pure Economic Loss
• Shareholder Claims
• Exception Procedure
• Locus Standi
• Non Joinder
• Duty Of Care

Itzikowitz v Absa Bank Ltd (20729/2014)

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

Court

Supreme Court of Appeal

Case number

20729/2014

Judges

Ponnan, Cachalia, Willis, Saldulker, Fourie

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 t…

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• Pure Economic Loss
• Shareholder Claims
• Reflective Loss
• Wrongfulness
• Company Separate Personality

Hantisi and Others v Kgalagadi Investment Holdings (2535/07)

Hantisi and Others v Kgalagadi Investment Holdings (2535/07) [2016] ZANWHC 9 (3 March 2016)

Court

North West High Court, Mafikeng

Case number

2535/07

Judge

A A Landman

The High Court dismissed an application to substitute company directors for a deregistered company in a shareholders’ claim, finding no proper basis and awarding attorney-client costs.

• Substitution Of Parties
• Company Deregistration
• Director Liability
• Shareholder Claims
• Substitution-of-parties
• Company-deregistration

Roestorf NO and Another v Johns (12036/07)

Roestorf NO and Another v Johns (12036/07) [2012] ZAKZDHC 48 (28 August 2012)

Court

Kwazulu-Natal High Court, Durban

Case number

12036/07

Judge

Lopes

The High Court granted absolution from the instance, holding that shareholders were not the proper plaintiffs to claim losses caused to the company.

• Rule In Foss V Harbottle
• Shareholder Claims
• Company Liquidation
• Derivative Actions
• Double Jeopardy
• Quantum Of Damages

Roestorf NO and Another v Johns (12036/07)

Roestorf NO and Another v Johns (12036/07) [2012] ZAKZDHC 39; 2013 (2) SA 459 (KZD) (28 June 2012)

Court

Kwazulu-Natal High Court, Durban

Case number

12036/07

Judge

Lopes

The court held that the plaintiffs, as majority shareholders, were not the proper parties to claim damages for the loss of share value and loan accounts resulting from the liquidation of the company. The rule in Foss v Harbottle dictates that the company itself is the proper plaintiff in such circumstances, and none of the recognised exceptions to the rule applied. The plaintiffs had every opportunity to authorise the company to institute proceedings or to liaise with the liquidators but failed to do so. Allowing the claim would circumvent the liquidation process and potentially prejudice cre…

Source excerpt

• Rule In Foss V Harbottle
• Shareholder Claims
• Company Liquidation
• Derivative Actions
• Damages For Loss Of Shares

McCrae v Absa Bank Limited (08/42229)

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

Court

South Gauteng High Court, Johannesburg

Case number

08/42229

Judge

Satchwell

High Court held that a shareholder’s personal claim was not barred at exception stage by the Foss v Harbottle rule where no double recovery risk was shown.

• Foss V Harbottle Rule
• Double Recovery
• Duty Of Care
• Shareholder Claims
• Liquidation
• Personal Delictual Claim

Jukuda v African Pioneer Investments Ltd and Another (1770/2008)

Jukuda v African Pioneer Investments Ltd and Another (1770/2008) [2009] ZAECPEHC 2 (5 March 2009)

Court

Eastern Cape High Court, Port Elizabeth

Case number

1770/2008

Judge

Jones

The court upheld a Rule 30 application and exceptions, finding the particulars of claim vague, embarrassing, and lacking a cause of action.

• Pleading Irregularity
• Exception No Cause Of Action
• Vague And Embarrassing Pleading
• Shareholder Claims
• Dividends
• Director Liability