K12.5. Derivative actions
403. |
A straightforward and self-contained issue
concerning derivative actions may also be addressed. |
|
|
403.1 |
Before the Woolf reforms were enacted, there
had been inserted into the RSC, Order 15 r 12A dealing with derivative actions. This made
procedural provision for an action brought by a member of a company on behalf of the
company for a wrong done to the company in circumstances where there has been a fraud on
the minority or an abuse of power by the majority. (Note 349) |
|
|
403.2 |
This has now been re-enacted (and extended to
legal entities other than companies) by CPR 19.9. Recognizing that a shareholder may not
have an indefeasible right to sue on the company's behalf, the procedure requires
continuation of a derivative action to be subject to the court's permission. |
|
|
403.3 |
The HCR do not contain any express treatment
of derivative actions. Readers are asked whether a similar provision should be adopted in
Hong Kong: Proposal 24. |
Notes
349 |
See, eg, Estmanco
(Kilner House) Ltd v GLC [1982] 1 WLR 2; Smith v Croft (No 2) [1988] Ch 114;
Anglo-Eastern (1985) Ltd v Karl Knutz [1988] 1 HKLR 322. <back> |
|