Reverse Piercing of the Corporate Veil: Butcher Shop and Grill CC v Trustees for the time being of the Bymyam Trust 2023 (5) SA 68 (SCA)

Abstract

In Butcher Shop and Grill CC v Trustees for the time being of the Bymyam Trust (2023 (5) SA 68 (SCA)), the Supreme Court of Appeal was faced with the question whether the doctrine of piercing the corporate veil was broad enough to permit a reverse piercing of the corporate veil. The case dealt with an application brought by a lessee to reverse pierce the corporate veil to enable it to claim remission of rent payable to the lessor in circumstances where vis major had interfered with the beneficial use and enjoyment of the leased property by a sublessee. The Supreme Court of Appeal held that there was no scope for the application of the remedy of reverse piercing the corporate veil under the existing principles of South African common law to the facts of this case. It also held that this was not a case where the development of the common law was warranted so as to allow a court to reverse pierce the corporate veil. This note critically analyses the judgment and evaluates whether the court came to the correct decision not to reverse pierce the corporate veil. It also examines the distinction between traditional veil piercing, insider and outsider reverse piercing, and lifting of the veil, and considers whether reverse piercing of the veil ought to be recognised in South African law.