Abstract

The proper plaintiff principle was developed under common law in recognition of the separate personality of a company as one of the fundamental rules of company law. However, the concentration of the decision-making power in shareholding groups and the directors of the company eventually led to the realisation that the unconditional application of the principle threatened the rights of minority shareholders, creditors and the company itself. Corporate governance policies placing greater focus on the enlightened shareholder approach, have resulted in a corporate legal enforcement framework in the Companies Act 71 of 2008 that provides remedies extending legal standing to a larger class of persons. The inclusion of these remedies appears to put the proper plaintiff principle at risk as its relevance under the Act has now been put into question. This article examines the proper plaintiff principle and the remedies now available in the Companies Act. It also considers the reasoning behind the court’s interpretation of the proper plaintiff principle and certain remedies regarding claims for reflective loss in Hlumisa Investment Holdings (RF) Ltd v Kirkinis, to illustrate that the principle remains relevant despite the inclusion of the corporate legal enforcement framework that is now embodied in the Companies Act 74 of 2008.