Peel v Hamon J & C Engineering (Pty) Ltd: Ignoring the Result-Requirement of Section 163(1)(A) of the Companies Act and Extending the Oppression Remedy Beyond its Statutorily Intended Reach

  • HGJ Beukes Unisa
  • WJC Swart Unisa
Keywords: Section 163, oppression, unfair prejudice, unfair disregard, interests, company law, corporate law, minority protection

Abstract

This case note provides a concise and understandable version of the confusing facts in Peel v Hamon J&C Engineering (Pty) Ltd, and deals with the remedy provided for in section 163 of the Companies Act (the oppression remedy). The importance of drawing a distinction between the application of this section and the orders that the Court can make to provide relief in terms of subsection (2) is explained, after which each requirement contained in subsection (1)(a) is analysed. With reference to the locus standi-requirement, it is indicated that the judgment is not to be regarded as authority for the contention that a shareholder or a director who wants to exercise the oppression remedy need not have been a shareholder or a director of the company at the time of the conduct. With reference to the conduct-requirement, it is indicated that it would have been more appropriate for the applicants to have made use of a remedy in terms of the law of contract. Most importantly, the result-requirement is indicated to have been ignored, as a lack of certainty that there will be a result is argued not to constitute a result. Ignoring the result-requirement is explained to have resulted in ignoring the detriment-requirement, in turn. Accordingly, it is concluded that the oppression remedy was utilised without the specified statutory criteria having been satisfied and that the applicants' interests were protected by a remedy which should not have found application under the circumstances, as this was beyond the remedy's statutorily intended reach.

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References

BIBLIOGRAPHY

Literature

Beukes and Swart 2012 SA Merc LJ

Beukes HGJ and Swart WJC "Blurring the Dividing Line between the Oppression Remedy and the Derivative Action: Kudumane Investment Holdings Ltd v Northern Cape Manganese Company (Pty) Ltd and Others" 2012 SA Merc LJ 467-472

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Bayly v Knowles 2010 4 SA 548 (SCA)

Count Gotthard SA Pilati v Witfontein Game Farm (Pty) Ltd 2013 2 All SA 190 (GNP)

Ex parte Avondzon Trust (Edms) Bpk 1968 1 SA 340 (T)

Garden Province Investment v Aleph (Pty) Ltd 1979 2 SA 525 (D)

Grancy (Pty) Ltd v Manala 2013 3 All SA 111 (SCA)

Kudumane Investment Holdings Ltd v Northern Cape Manganese Company (Pty) Ltd 2012 4 All SA 203 (GSJ)

Louw v Nel 2011 2 SA 172 (SCA)

Peel v Hamon J&C Engineering (Pty) Ltd 2013 2 SA 331 (GSJ)

Utopia Vakansie-Oorde Bpk v Du Plessis 1974 3 SA 148 (A)

Legislation

Australia

Australian Corporations Act 50 of 2001

Canada

Canada Business Corporations Act RSC 1985 c C-44

South Africa

Black Economic Empowerment Act 53 of 2003

Companies Act 61 of 1973

Companies Act 71 of 2008

Published
2017-04-11
How to Cite
Beukes, H., & Swart, W. (2017). Peel v Hamon J & C Engineering (Pty) Ltd: Ignoring the Result-Requirement of Section 163(1)(A) of the Companies Act and Extending the Oppression Remedy Beyond its Statutorily Intended Reach. Potchefstroom Electronic Law Journal, 17(4), 1690-1708. https://doi.org/10.17159/1727-3781/2014/v17i4a2177
Section
Notes