By: Keagan Hyslop, Kate Anderson
A fundamental principle of South African company law is “ majority rules ” – shareholders and directors are bound by the decisions of the majority even where such decisions are not in their interest. However, recognising the potential for unfair abuse of such a principle, the Companies Act 71 of 2008 (Companies Act) devised section 163, which allows a director or shareholder of a company to apply to court for relief from oppressive conduct of the company or a person related to it that unfairly disregards or prejudices the interests of the applicant. Section 163 therefore paints the picture of a majority shareholder abusing its ability to control the company to unfairly bully or oppress minority shareholders. But what happens if the shareholders are equals – can a 50/50 shareholder be oppressed by their equal? This was the question before the High Court in Van der Watt v Schoeman and Others [2024] 91 SA 531 (ECGq).