Siblings But Not Twins: The Oppression Remedy and the Derivative Action – Larrett v Coega Development Corporation (Pty) Ltd 2015 (6) SA 16 (ECG) in Retrospect

Abstract

Although the oppression remedy and the derivative action are separate and distinct remedies, the boundary between the statutory shareholder remedies is often blurred. The derivative action and the oppression remedy are not mutually exclusive. This assertion is borne out by the fact that conduct which may result in harm to a company and may therefore be the subject of a derivative claim may also constitute oppression to minority shareholders. This aspect is even more daunting for an aggrieved shareholder, especially since one remedy will have to be pursued to the exclusion of the other. Determining the correct remedy to pursue has proven an eminently laborious exercise, and in some instances fatal to obtaining relief. The vexed questions concerning the oppression remedy and the derivative action are encapsulated in Larrett v Coega Development Corporation (Pty) Ltd 2015 (6) SA 16 (ECG), where the High Court held that section 165 and not section 163 of the Companies Act 71 of 2008 ought to have been followed from the onset by the aggrieved applicant shareholder.