Introduction
A derivative claim is a claim by a member of a company in respect of a cause of action vested in the company and seeking relief on behalf of the company and was established as an exception to the rule in Foss v Harbottle. The derivative action protects the minority shareholders by allowing them to bring an action on behalf of the company (after they got a leave from the court) where the company itself was not pursuing because the wrongdoers were in control and preventing it from initiating an action against them. They seem to be given an opportunity to ‘stand up’ to preserve their interest indirectly and seek the justice for the company as a whole. By bringing this corporate remedy, they may remain as a member of the company and they have a possibility of having an indemnity for cost (as in the judgment of Wallersteiner v Moir (No 2) : the court may order the company to pay the plaintiff’s cost as the benefit of a successful derivative claim will accrue to the company and only indirectly to the plaintiff as a member of the company).
Discussion on sections 260-264
Sections 260-264 of Companies Act 2006 (the Act) can be considered as ‘new regime’ for regulating derivative actions supersedes the common law derivative action. Under the Act, a derivative action may be brought only under statute , by any member , against any director (including former and shadow directors) and other persons implicated in the breach , former directors are included and/or in respect of negligence, default, breach of duty and breach of trust by a director of the company.
The Act allows negligence as the sole ground unlike common law which required the claimant to establish ‘fraud’ even if negligence existed. It is believed that the ‘d...
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...ust make an allegation of negligence”. It seems too easy for the shareholder to bring the action without knowing their hidden agenda. Second, the courts will be more involved with companies' internal management as they are given the full power of giving permission on a derivative action. Besides that, the filtering process is a time-consuming and will affect the interest of the company. Third, even after the prima facie case has been proven, the court must dismiss the claim if it falls under section 263(2). Lastly, when it regards to the court’s discretion whether to allow the claim to proceed, the court has to spend more time to analyze the requirement of good faith, various combinations of interest within the company as a whole, the views of the independent members, the ratification analysis and accordingly shifting away to the nature of the wrongdoing itself.
R v International Stock Exchange of the UK and the Republic of Ireland Ltd, ex p Else (1982) Ltd and others [1993] 2 CMLR 677
Axiak v Ingram (2012) 82 NSWLR 36 (Axiak) was extremely pertinent, standing as the “only decision of this court dealing with the construction of the blameless accident provisions of the MACA”. Critically, the case established that ‘non-tortious negligence’ is excluded from the MACA’s definition of “fault” in s3. Such provisions artificially place fault upon the driver in order to secure CTP claims for victims.
The plaintiff, Cigna Health, owned shares of Audax’s Series B Preferred Stock. In 2014, a majority of Audax’s board and 66.9% of the shareholders approved the merger. The shareholders approved the merger via written consent delivered in the form of support agreements, which included a release of any claims against Optum, an agreement to be bound by the terms of the merger agreement, and an appointment of a stockholder representative. Cigna did not vote in favor of the merger and did not sign the support agreement. The merger agreement required surrender of shared and execution of a Letter of Transmittal in order for a shareholder to receive the merger consideration. The Letter of Transmittal contained a separate release obligation that did not appear in the merger agreement but only appeared in the Letter of Transmittal, and required that stockholders surrendering their shares agree to the obligations contained in the merger agreement, which included an indemnification
Mark A. Kornfeld, (2014), Tracking New Developments in Securities Litigation, Aspatore, WL 1245076. Retrieved from: https://1-next-westlaw-com.proxy1.library.jhu.edu/
The decision in Equuscorp is significant, as it has made clear several principles that were once ambiguous under Australian law. It ratifies that restitutionary remedies are unavailable for a claim for money had and received where recovery would reduce coherence in the law. Furthermore, Equuscorp has confirmed that a bare cause of action can be assigned where the assignee has a genuine commercial interest in its enforcement.
This is actually an example of mixed corporate governance. There are independent board members in order to make sure that the operational and financial health of the company can gauged accurately from time to time. Peter Langerman did an in depth enquiry into the financial matters just because Dunlap had offered to resign in response to a trivial question. The board should have kept a watch on the firm’s financial health from the beginning. But after realising the gravity of situation, board was prompt and unanimous in firing Albert Dunlap which shows good corporate governance.
Tort is a wrong that involves a breach of civil duty owed to someone else.
There are several disagreements over the meaning of negligence, but it can be said to occur when the defendant has behaved in the way in which a reasonable person would not . There exists numerous crimes for which the mens rea is negligence, although some argue negligence should not be classified as a mens rea, where most of these are minor crimes of a regulatory nature . The concept of negligence is undoubtedly complex due to the fact that it is not certain whether it deserves criminal punishment. Whether culpability lies in choosing to act wrongly when having the capacity to do otherwise, or manifests itself in other forms such as carrying out a serious criminal offence regardless of lack of intention, recklessness or knowledge, continues to provoke debate. The arguments for and against the notion that serious criminal offences
Negligence, as defined in Pearson’s Business Law in Canada, is an unintentional careless act or omission that causes injury to another. Negligence consists of four parts, of which the plaintiff has to prove to be able to have a successful lawsuit and potentially obtain compensation. First there is a duty of care: Who is one responsible for? Secondly there is breach of standard of care: What did the defendant do that was careless? Thirdly there is causation: Did the alleged careless act actually cause the harm? Fourthly there is damage: Did the plaintiff suffer a compensable type of harm as a result of the alleged negligent act? Therefore, the cause of action for Helen Happy’s lawsuit will be negligence, and she will be suing the warden of the Peace River Correctional Centre, attributable to vicarious liability. As well as, there will be a partial defense (shared blame) between the warden and the two employees, Ike Inkster and Melvin Melrose; whom where driving the standard Correction’s van.
Gregg is a prime example where perspectives have clashed concerning loss of chance. The 3:2 majority saw no legal acknowledgement of loss of chance but the judgements voiced concern of the legitimacy of the balance of probabilities. Lord Nicholls highlights the arbitrary nature of the 50% barrier restricting eligibility of claimants who had suffered as a result of medical negligence holding favour to patients having “a right to a remedy as much where his prospects of recovery were less than 50-50 as where they exceeded 50-50 ”. A moral consideration but arguments of policy considerations blocks concepts like this. Growing concern for the immunity held by professions saw developments in the law, however the loss of chance is yet to be clarified. The diverse nature of medicine and the hypothetical aspect of evidence relied upon means no one formula will ever be adequate for determining the duty owed and the extent on liability. This is all dependent on the individual traits of the case and the consequences which may be provoked from the judgements. Policy concerns restrict the liability of these professions to protect general interest and prevent ri...
Even though the principal does not authorize, ratify, participate in, or know of the misconduct, he/she may be held for an agent’s tort committed in the course and scope of the agent’s employment. As noted in Case Study 1, an agent is to comply with all lawful instructions received from the principal and persons designated by the principal concerning agent’s actions on behalf of the principal. A principal who is under a duty to provide protection is subject to liability to such others for harm caused to them by the failure of such agent to perform the duty. A principal is not relieved from the separable part of a contract which he/she authorized the agent to make by the fact that the agent under took. Even where the agent’s unauthorized act constitutes a fraud on both the principal and the third person, the partial validity rule is applicable.
In our given scenario we are asked to discuss legal principles influencing the likelihood of any successful action against Steve in the grounds of negligence. Steve’s negligent driving caused a series of events that caused losses to the other people presented in the scenario and they take actions against Steve in the grounds of negligence. At first we must understand what negligence is. The tort of negligence provides the potenti...
[7] Cavendish Lawcards Series (2002) Company Law (3rd edn), p.15 [8] [1976] 3 All ER 462, CA. [9] Griffin, S. (1996) Company Law Fundamental Principles (2nd edn), p.19 [10] [1990] Ch 433. [11] Lecture notes [12] Lecture notes [13] [1939] 4 All ER 116.
The concept ‘derivative action’ is not something new to common law. It was developed as an exception to the rule laid down in Foss v Harbottle, an 1846 case. It is an equitable remedy that is resorted to by a shareholder when there is no proper remedy available. A derivative action refers to a claim made by a shareholder of the company on its behalf when the company is disabled from doing so due to the wrongdoers controlling it.
Board of Directors) is expected to do an extensive research before taking such an important decision, which Andy clearly did not. Hence, Andy does have a liability under section 180(1) of the Corporations Act, since he did not take did not act with due care or diligence, which he was supposed to, being on the board of directors of the company. Further, (In Re Brazilian Rubber Plantations and Estates Ltd (1911) 1 Ch 425 at 437) Justice Neville said of a director of a company that- ‘He is not, I think, bound to take any definite part in the conduct of the company’s business, but so far as he does undertake it he must use reasonable care in its dispatch. Such reasonable care must, I think, be measured by the care an ordinary man might be expected to take in the same circumstances on his own behalf.’ In the case of (Australian Securities and Investments Commission v Healey (2011) FCA 717), it was held that, Each and every director has a cardinal role in the management of the company and is positioned at the top of the structure of the organisation. It is also a set law that the higher the position held by a person in an organisation the greater would be the responsibility on