ircumstances to
bring a derivative action on behalf of a company as otherwise wrongs would go unredressed where
the wrongdoers controlled the company (Burland v Earle [1902] A.C. 83 PC (Can) at 93-94 per Lord
Davey). As was stated by Lord Denning in Wallersteiner v Moir (No. 2) [1975] 1 Q.B. 373 CA at 390:
“But suppose [the company] is defrauded by insiders who control its affairs--by directors who hold a
majority of the shares--who then can sue for damages? Those directors are themselves the
wrongdoers. If a board meeting is held, they will not authorise the proceedings to be taken by the
company against themselves. If a general meeting is called, they will vote down any suggestion that
the company should sue them themselves. Yet the company is the one person who is damnified. It is
the one person who should sue. In one way or another means must be found for the company to sue.
Otherwise the law would fail in its purpose. Injustice would be done without redress.”
In approaching the question of whether a multiple derivative action should be allowed, Lord Millett
reversed the burden of proof and considered that it was not for the plaintiff to demonstrate that the
multiple derivative action was maintainable in Hong Kong but for the defendant to show why it was
not (at [68]). A way to assess the availability of a double derivative action is to examine the
substantial objections raised by the appellant to the allowing of such an action and the way in which
Lord Millett dealt with them. As will be seen, the underlying theme of Lord Millet's decision was that
there is no justification for distinguishing between the single derivative action and the multiple
derivative action, which entails that there is no conceivable reason why the procedural and other
requirements of the two kinds of action should differ.
*L.Q.R. 211 The first objection
The first objection was that such an action contravenes fundamental principles of company law, in
particular the principles (1) that the company is a separate legal person from its shareholders, and (2)
that save in exceptional circumstances directors owe fiduciary duties to the company and not its
shareholders let alone to the shareholders of its parent company (at [69(1)]). Lord Millett considered
that this objection was seriously weakened by the fact that other Commonwealth jurisdictions had
introduced the multiple derivative action by legislation whereby proceedings could be brought by a
person who is “a member … of the company or of a related body corporate body …” (Australian
Corporations Act 2001 s.236(1)(a)) without finding “it necessary to make any significant changes to
company law to accommodate them” (at [70]).
The second and third objections
The second objection was that the multiple derivative action was in truth two derivative actions,
one by the shareholder on behalf of the parent company against the subsidiary for its failure to sue
the wrongdoers and the other by the parent company on behalf of the subsidiary against the
wrongdoers. Neither action is maintainable, first because the subsidiary owes no duty to its parent
company to bring proceedings against the wrongdoers, and secondly because the parent company is
in control of the subsidiary and does not need the intervention of the shareholders to enable it to bring
such proceedings. The third objection was that a shareholder in a
本论文由英语论文网提供整理,提供论文代写,英语论文代写,代写论文,代写英语论文,代写留学生论文,代写英文论文,留学生论文代写相关核心关键词搜索。