Aspects of the application of issue Estoppel on directors’ fiduciary duties in South Africa: possible lessons from the United Kingdom and related jurisdictions Royal Sechaba case

• Main Author: Howard Chitimira
• Format: Article
• Language: English
• Published: Bucharest University of Economic Studies 2017-10-01
• Series: Juridical Tribune
• Subjects: : issue Estoppel; res judicata; fiduciary duties; application; South Africa.
• Online Access: http://tribunajuridica.eu/arhiva/An7v11/10.%20Chitimira.pdf

The doctrine of estoppel precludes a person (asserter) from asserting something different or contrary to what is implied by a previous action, conduct or statement of that person or by a previous pertinent judicial determination. While there are various types of estoppel, this article is primarily focused on the application of issue estoppel in relation to certain aspects of the directors’ fiduciary duties in South Africa (s 76 of the Companies Act 71 of 2008 (Companies Act 2008)), in light of the judgment in Royal Sechaba v Coote (366/2013) [2014] ZASCA 85 (30 May 2014) (Royal Sechaba case). Issue estoppel could be defined to include instances where a person is precluded from re-litigating or raising a particular issue in a cause of action that was previously decided by a final judgment of a competent court between the same parties in future cases that have a different cause of action involving such parties. Issue estoppel is closely related to res judicata. For instance,both issue estoppel and res judicata are generally aimed at preventing the re-litigation of the same issues and same cause of actions that were previously decided by a final judgment in the relevant courts between same parties. Nonetheless, it is widely acknowledged that the application these two concepts is quite different in practice. For instance, some jurisdictions such as the United Kingdom (UK) and South Africa employs English law and Roman-Dutch law (common law) principles respectively, to distinguish between issue estoppel and res judicata. Likewise, similar common law principles are employed in the United States of America (USA), Canada and Australia to distinguish res judicata and issue estoppel in various ways. For example, issue estoppel is sometimes referred to as collateral estoppel, issue preclusion, claim preclusion or cause of action estoppel in USA, Canada and Australia. Despite this, it should be noted that a detailed discussion of the different requirements, merits and demerits of issue estoppel and res judicata in various jurisdictions is beyond the scope of this article. Put differently, this article provides a brief discussion of the application of issue estoppel to commercial agreements (certain aspects of the directors’ fiduciary duties) in South Africa in accordance with the Royal Sechaba case. This is done to investigate whether the requirements of issue estoppel were correctly applied and enforced in Royal Sechaba case.