Judicial Discretion in Derivative Actions Under the Companies Act of 2008
Bibliographic record
Abstract
The judicial discretion to grant leave for a derivative action, in terms of s 165(5)(b) of the \nCompanies Act 71 of 2008, involves a tension between two equally important policy \nobjectives. On the one hand is the benefit of a right of redress, where a stakeholder may \nseek redress on the company’s behalf; on the other hand is the indisputable need to protect \ncompanies and their directors from nuisance actions by stakeholders. The guiding criteria \nfor the granting of leave attempt to draw a proper balance between these two objectives. \nThey serve as checks and balances to curtail the abuse of the derivative action, by weeding \nout claims that are frivolous, vexatious or meritless. Much depends on the application by \nthe courts of the open-textured criteria for leave to institute derivative proceedings. The \nlegislature has left it to the courts to flesh out the interpretation, application and contours of \nthe guiding criteria and, thereby, to determine effectively the success or failure of this \nremedy in South African law. This article focuses on two leading criteria, namely that the \nproposed action must involve the ‘trial of a serious question of material consequence to the \ncompany’, and that it must be ‘in the best interests of the company’. Guidelines are \nsuggested for the proper judicial approach to these preconditions for a derivative action, \nbased on the jurisprudence developed in Australia, Canada, New Zealand and the \nUnited Kingdom, all of which have influenced the relevant provisions of the Companies \nAct.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.015 | 0.035 |
| Meta-epidemiology (narrow) | 0.000 | 0.001 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.008 | 0.009 |
| Scholarly communication | 0.009 | 0.005 |
| Open science | 0.002 | 0.006 |
| Research integrity | 0.017 | 0.014 |
| Insufficient payload (model declined to judge) | 0.006 | 0.002 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".