Abstract

The oppression remedy is a flexible mechanism for the protection of non-controlling shareholders and directors. It is a popular remedy invoked by minority shareholders, particularly in smaller companies or quasi-partnership type companies. In Parry v Dunn-Blatch & others (394/2022) [2024] ZASCA 19 (28 February 2024), the Supreme Court of Appeal was confronted with the issue of whether a director and co-shareholder of a quasi-partnership company could rely on the oppression remedy contained in s 163 of the South African Companies Act 71 of 2008 to have the terms of an agreement varied, despite having willingly signed it. This article critically analyses some important aspects of the judgment of the Supreme Court of Appeal in Parry. Relevant legal principles in comparative foreign jurisdictions are also considered, including the United Kingdom, Canada, Australia and New Zealand. First, the concept of ‘unfair prejudice’, which is central to the oppression remedy, is critically analysed. Secondly, the contours of the judicial power to make an order varying or setting aside an agreement in terms of s 163(2)(h) are critically evaluated. Thirdly, aspects of legal standing to invoke the oppression remedy are discussed, including the pertinence of the proper plaintiff rule laid down in Foss v Harbottle and the fundamental, though convoluted, issue of the overlap between the oppression remedy and the derivative action in terms of s 165 of the Companies Act 71 of 2008.