Evolving statutory derivative action principles in South Africa: The good faith criterion and other legal grounds
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Date
2021
Authors
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Journal ISSN
Volume Title
Publisher
Cambridge University Press
Abstract
The recent Supreme Court of Appeal (SCA) judgment in Lazarus Mbethe v United
Manganese of Kalahari raises jurisprudential questions regarding statutory derivative
actions in South Africa. For example, the SCA did not agree with the court a quo’s
ruling that the discretion to be exercised by the court is limited by provisions of section 165(5). The SCA also questioned whether it is necessary for South African
courts to follow the good faith criterion in the Australian case of Swansson v
Pratt as adopted into South African law through Mouritzen v Greystones
Enterprises (Pty) Ltd & Another. This article contributes to these questions, and proposes possible criteria for other requirements in section 165(5)(b) of the Companies
Act 71 of 2008. These other requirements are that the statutory derivative action
proceedings must involve “a trial of a serious question of material consequence
to a company” and that proceedings be “in the best interests of the company”.
Description
Keywords
Internal management principle, Companies Act 71 of 2008, Labour law, South Africa, Statutory derivative action proceedings
Citation
Mupangavanhu, B. M.et al. (2021). Evolving statutory derivative action principles in South Africa: The good faith criterion and other legal grounds. Journal of African Law, 65(2), 293–311. https://doi.org/10.1017/S0021855321000115