JOURNAL OF UWC FACULTY OF LAW | ISSN 2077-4907 | Short URL www.ldd.org.za

Dismantling obstacles impeding better governance in companies: Affirming the expansion of the interpretation of ‘shareholder and director’ under section 163 of the 2008 Act, pp. 337-410

Volume: Volume 25 - 2021

Article type: Refereed article

Author/s: Simphiwe Bidie

Impediments to corporate accountability have over the recent years manifested in diverse forms. What took place in Peel v Hamon J&C Engineering (Pty) Ltd is a case in point. The aim of this article is in two forms. First, from the commentaries and cases consulted, it is clear that the character of who must qualify in terms of the section 163 criterion is not settled. Moreover, this can be gleaned from the criticisms against Moshidi J’s judgment in Peel for having extended/expanded the section 163 remedy to afford relief to shareholders and directors whom the legislature may not have contemplated to cover under the relief.

The aim here is to argue in support of this expansion as promoting accountability. Secondly, it is to make some comments on the criterion that it is only a shareholder and a director who are accorded locus standi to invoke the remedy. From the discussion, the paper makes numerous commendable observations. First, the complaint raised in Peel was not an abuse of process; it was a genuine complaint/application seeking to address genuine and novel issues which often arise between the parties in company law. Second, Moshidi J’s judgment demonstrates evolution/progress for its contextual approach to the section 163 remedy’s interpretation. The judgment heralds/foreshadows colossal principles/practices within company law aimed at balancing stakeholder interests. Third, the judgment potently disentangles hurdles which normally impede accountability by company directors. Lastly, the paper recommends that other stakeholders be considered for relief under the remedy.

About the author/s

Simphiwe Bidie

Senior lecturer, Nelson R. Mandela School of Law, University of Fort Hare, South Africa. https://orcid.org/0000-0002-5022-2715

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