"The Launching of Delinquency Proceedings Under the Companies Act 71 of 2008 by means of the Derivative Action: Lewis Group Limited v Woollam 2017 (2) SA 547 (WCC)"

Abstract

The case of Lewis Group Limited v Woollam (2016 JDR 1861 (WCC)) dealt with an application brought by Lewis Group Limited in terms of section 165(3) of the Companies Act 71 of 2008 for an order setting aside a demand served on it by a shareholder, Mr David Woollam, on the ground that it was frivolous, vexatious or without merit. The main question before the court was whether, under the Companies Act, a shareholder may institute proceedings to declare a director delinquent under section 162 of the Companies Act 71 of 2008 using the derivative action. The court held that this may not be done. This note critically analyses the judgment and evaluates whether the court came to the correct decision.