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15.2
Derivative actions
Proposal 24
A provision regulating derivative actions should be adopted.
Interim Report para 403
Proposal 24 sought consultees' views on whether rules of court along the lines of RSC
O 15 r 12A ought to be introduced to regulate applications for leave to commence
derivative actions on behalf of companies.
This proposal has now been overtaken by events. On 25 June 2003, the Companies
(Amendment) Bill 2003 was introduced into Legco. It proposes to add a Part IVAA to
the Companies Ordinance whereby members of a "specified corporation" (which
includes a Hong Kong as well as a non-Hong Kong company) are to be allowed to
bring derivative actions on behalf of the company without leave of the court and may
be given leave to intervene to take over proceedings to which the company is a
party.
The court is to be empowered, on the application of any party to proceedings
brought by such a member, to strike out the proceedings on specified grounds, ie, that
the proceedings are not in the best interests of the company or have not been brought
in good faith or where service of prior written notice has not been effected.
On the assumption that the Bill becomes law, the Proposal becomes redundant. The
new arrangements ought, however, to be monitored in case they give rise to any
procedural problems of their own.
Recommendation 71: On the assumption that Part IVAA of the Companies
(Amendment) Bill 2003 becomes law, Proposal 24 (for the introduction of a
procedural scheme for the bringing of derivative actions) will have been
overtaken and should not be adopted.
Notes
Section 168BB.
Section 168BD.
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