Abstract

The legal position established in the famous case of Foss v Harbottle (Foss v Harbottle) is no longer applicable under the new corporate legal framework of the Companies Act 71 of 2008 (‘the Act’). The principle in Foss v Harbottle, stated simply, is that where a wrong is done to a company, only the company may sue for damages caused to it. I argue that the derivative actions established through the Act, along with South Africa’s new corporate governance principles, negates the outdated notion that a company alone may sue for damages caused to it. Through the assessment of the case of Hlumisa Investment Holdings (RF) and Another v Kirkinis and Others (‘Hlumisa’), along with ss 218(2), 165, 157, 20(4) and 162(2) of the Act, it will be established that stakeholders of a company have the intrinsic legal standing to institute derivate actions on behalf of companies, in South African Company Law.