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| |
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244 | Application for permission to continue derivative claim |
| |
(1) | A member of a company who brings a derivative claim under this Chapter |
| |
must apply to the court for permission (in Northern Ireland, leave) to continue |
| |
| |
(2) | If it appears to the court that the application and the evidence filed by the |
| 5 |
applicant in support of it do not disclose a prima facie case for giving |
| |
permission (or leave), the court— |
| |
(a) | must dismiss the application, and |
| |
(b) | may make any consequential order it considers appropriate. |
| |
(3) | If the application is not dismissed under subsection (2), the court— |
| 10 |
(a) | may give directions as to the evidence to be provided by the company, |
| |
| |
(b) | may adjourn the proceedings to enable the evidence to be obtained. |
| |
(4) | On hearing the application, the court may— |
| |
(a) | give permission (or leave) to continue the claim on such terms as it |
| 15 |
| |
(b) | refuse permission (or leave) and dismiss the claim, or |
| |
(c) | adjourn the proceedings on the application and give such directions as |
| |
| |
245 | Application for permission to continue claim as a derivative claim |
| 20 |
(1) | This section applies where— |
| |
(a) | a company has brought a claim, and |
| |
(b) | the cause of action on which the claim is based could be pursued as a |
| |
derivative claim under this Chapter. |
| |
(2) | A member of the company may apply to the court for permission (in Northern |
| 25 |
Ireland, leave) to continue the claim as a derivative claim on the ground that— |
| |
(a) | the manner in which the company commenced or continued the claim |
| |
amounts to an abuse of the process of the court, |
| |
(b) | the company has failed to prosecute the claim diligently, and |
| |
(c) | it is appropriate for the member to continue the claim as a derivative |
| 30 |
| |
(3) | If it appears to the court that the application and the evidence filed by the |
| |
applicant in support of it do not disclose a prima facie case for giving |
| |
permission (or leave), the court— |
| |
(a) | must dismiss the application, and |
| 35 |
(b) | may make any consequential order it considers appropriate. |
| |
(4) | If the application is not dismissed under subsection (3), the court— |
| |
(a) | may give directions as to the evidence to be provided by the company, |
| |
| |
(b) | may adjourn the proceedings to enable the evidence to be obtained. |
| 40 |
(5) | On hearing the application, the court may— |
| |
(a) | give permission (or leave) to continue the claim as a derivative claim on |
| |
such terms as it thinks fit, |
| |
(b) | refuse permission (or leave) and dismiss the application, or |
| |
|
| |
|
| |
|
(c) | adjourn the proceedings on the application and give such directions as |
| |
| |
246 | Whether permission to be given |
| |
(1) | The following provisions have effect where a member of a company applies for |
| |
permission (in Northern Ireland, leave) under section 244 or 245. |
| 5 |
(2) | Permission (or leave) must be refused if the court is satisfied— |
| |
(a) | that a person acting in accordance with section 158 (duty to promote the |
| |
success of the company) would not seek to continue the claim, or |
| |
(b) | where the cause of action arises from an act or omission that is yet to |
| |
occur, that the act or omission has been authorised by the company, or |
| 10 |
(c) | where the cause of action arises from an act or omission that has |
| |
already occurred, that the act or omission— |
| |
(i) | was authorised by the company before it occurred, or |
| |
(ii) | has been ratified by the company since it occurred. |
| |
(3) | In considering whether to give permission (or leave) the court must take into |
| 15 |
| |
(a) | whether the member is acting in good faith in seeking to continue the |
| |
| |
(b) | the importance that a person acting in accordance with section 158 |
| |
(duty to promote the success of the company) would attach to |
| 20 |
| |
(c) | where the cause of action results from an act or omission that is yet to |
| |
occur, whether the act or omission could be, and in the circumstances |
| |
| |
(i) | authorised by the company before it occurs, or |
| 25 |
(ii) | ratified by the company after it occurs; |
| |
(d) | where the cause of action arises from an act or omission that has |
| |
already occurred, whether the act or omission could be, and in the |
| |
circumstances would be likely to be, ratified by the company; |
| |
(e) | whether the company has decided not to pursue the claim; |
| 30 |
(f) | whether the act or omission in respect of which the claim is brought |
| |
gives rise to a cause of action that the member could pursue in his own |
| |
right rather than on behalf of the company. |
| |
(4) | In considering whether to give permission (or leave) the court shall have |
| |
particular regard to any evidence before it as to the views of members of the |
| 35 |
company who have no personal interest, direct or indirect, in the matter. |
| |
(5) | The Secretary of State may by regulations— |
| |
(a) | amend subsection (2) so as to alter or add to the circumstances in which |
| |
permission (or leave) is to be refused; |
| |
(b) | amend subsection (3) so as to alter or add to the matters that the court |
| 40 |
is required to take into account in considering whether to give |
| |
| |
(6) | Before making any such regulations the Secretary of State shall consult such |
| |
persons as he considers appropriate. |
| |
(7) | Regulations under this section are subject to affirmative resolution procedure. |
| 45 |
|
| |
|
| |
|
247 | Application for permission to continue derivative claim brought by another |
| |
| |
(1) | This section applies where a member of a company (“the claimant”)— |
| |
(a) | has brought a derivative claim, |
| |
(b) | has continued as a derivative claim a claim brought by the company, or |
| 5 |
(c) | has continued a derivative claim under this section. |
| |
(2) | Another member of the company (“the applicant”) may apply to the court for |
| |
permission (in Northern Ireland, leave) to continue the claim on the ground |
| |
| |
(a) | the manner in which the proceedings have been commenced or |
| 10 |
continued by the claimant amounts to an abuse of the process of the |
| |
| |
(b) | the claimant has failed to prosecute the claim diligently, and |
| |
(c) | it is appropriate for the applicant to continue the claim as a derivative |
| |
| 15 |
(3) | If it appears to the court that the application and the evidence filed by the |
| |
applicant in support of it do not disclose a prima facie case for giving |
| |
permission (or leave), the court— |
| |
(a) | must dismiss the application, and |
| |
(b) | may make any consequential order it considers appropriate. |
| 20 |
(4) | If the application is not dismissed under subsection (3), the court— |
| |
(a) | may give directions as to the evidence to be provided by the company, |
| |
| |
(b) | may adjourn the proceedings to enable the evidence to be obtained. |
| |
(5) | On hearing the application, the court may— |
| 25 |
(a) | give permission (or leave) to continue the claim on such terms as it |
| |
| |
(b) | refuse permission (or leave) and dismiss the application, or |
| |
(c) | adjourn the proceedings on the application and give such directions as |
| |
| 30 |
| |
Derivative proceedings in Scotland |
| |
248 | Derivative proceedings |
| |
(1) | In Scotland, a member of a company may raise proceedings in respect of an act |
| |
or omission specified in subsection (3) in order to protect the interests of the |
| 35 |
company and obtain a remedy on its behalf. |
| |
(2) | A member of a company may raise such proceedings only under subsection |
| |
| |
(3) | The act or omission referred to in subsection (1) is any actual or proposed act |
| |
or omission involving negligence, default, breach of duty or breach of trust by |
| 40 |
a director of the company. |
| |
(4) | Proceedings may be raised under subsection (1) against (either or both)— |
| |
(a) | the director referred to in subsection (3), or |
| |
|
| |
|
| |
|
| |
(5) | It is immaterial whether the act or omission in respect of which the proceedings |
| |
are to be raised or, in the case of continuing proceedings under section 250 or |
| |
252, are raised, arose before or after the person seeking to raise or continue |
| |
them became a member of the company. |
| 5 |
(6) | This section does not affect— |
| |
(a) | any right of a member of a company to raise proceedings in respect of |
| |
an act or omission specified in subsection (3) in order to protect his own |
| |
interests and obtain a remedy on his own behalf, or |
| |
(b) | the court’s power to make an order under section 461(2)(c) of the |
| 10 |
Companies Act 1985 (c. 6) or anything done under such an order. |
| |
| |
(a) | proceedings raised under subsection (1) are referred to as “derivative |
| |
| |
(b) | the act or omission in respect of which they are raised is referred to as |
| 15 |
| |
(c) | “director” includes a former director, |
| |
(d) | references to a director include a shadow director, and |
| |
(e) | references to a member of a company include a person who is not a |
| |
member but to whom shares in the company have been transferred or |
| 20 |
transmitted by operation of law. |
| |
249 | Requirement for leave and notice |
| |
(1) | Derivative proceedings may be raised by a member of a company only with the |
| |
| |
(2) | An application for leave must— |
| 25 |
(a) | specify the cause of action, and |
| |
(b) | summarise the facts on which the derivative proceedings are to be |
| |
| |
(3) | If it appears to the court that the application and the evidence produced by the |
| |
applicant in support of it do not disclose a prima facie case for granting it, the |
| 30 |
| |
(a) | must refuse the application, and |
| |
(b) | may make any consequential order it considers appropriate. |
| |
(4) | If the application is not refused under subsection (3)— |
| |
(a) | the applicant must serve the application on the company, |
| 35 |
| |
(i) | may make an order requiring evidence to be produced by the |
| |
| |
(ii) | may adjourn the proceedings on the application to enable the |
| |
evidence to be obtained, and |
| 40 |
(c) | the company is entitled to take part in the further proceedings on the |
| |
| |
(5) | On hearing the application, the court may— |
| |
(a) | grant the application on such terms as it thinks fit, |
| |
(b) | refuse the application, or |
| 45 |
|
| |
|
| |
|
(c) | adjourn the proceedings on the application and make such order as to |
| |
further procedure as it thinks fit. |
| |
250 | Application to continue proceedings as derivative proceedings |
| |
(1) | This section applies where— |
| |
(a) | a company has raised proceedings, and |
| 5 |
(b) | the proceedings are in respect of an act or omission which could be the |
| |
basis for derivative proceedings. |
| |
(2) | A member of the company may apply to the court to be substituted for the |
| |
company in the proceedings, and for the proceedings to continue in |
| |
consequence as derivative proceedings, on the ground that— |
| 10 |
(a) | the manner in which the company commenced or continued the |
| |
proceedings amounts to an abuse of the process of the court, |
| |
(b) | the company has failed to prosecute the proceedings diligently, and |
| |
(c) | it is appropriate for the member to be substituted for the company in |
| |
| 15 |
(3) | If it appears to the court that the application and the evidence produced by the |
| |
applicant in support of it do not disclose a prima facie case for granting it, the |
| |
| |
(a) | must refuse the application, and |
| |
(b) | may make any consequential order it considers appropriate. |
| 20 |
(4) | If the application is not refused under subsection (3)— |
| |
(a) | the applicant must serve the application on the company, |
| |
| |
(i) | may make an order requiring evidence to be produced by the |
| |
| 25 |
(ii) | may adjourn the proceedings on the application to enable the |
| |
evidence to be obtained, and |
| |
(c) | the company is entitled to take part in the further proceedings on the |
| |
| |
(5) | On hearing the application, the court may— |
| 30 |
(a) | grant the application on such terms as it thinks fit, |
| |
(b) | refuse the application, or |
| |
(c) | adjourn the proceedings on the application and make such order as to |
| |
further procedure as it thinks fit. |
| |
| 35 |
(1) | The court must refuse leave to raise derivative proceedings or an application |
| |
under section 250 if satisfied— |
| |
(a) | that a person acting in accordance with section 158 (duty to promote the |
| |
success of the company) would not seek to raise or continue the |
| |
proceedings (as the case may be), or |
| 40 |
(b) | where the cause of action is an act or omission that is yet to occur, that |
| |
the act or omission has been authorised by the company, or |
| |
(c) | where the cause of action is an act or omission that has already |
| |
occurred, that the act or omission— |
| |
(i) | was authorised by the company before it occurred, or |
| 45 |
|
| |
|
| |
|
(ii) | has been ratified by the company since it occurred. |
| |
(2) | In considering whether to grant leave to raise derivative proceedings or an |
| |
application under section 250, the court must take into account, in particular— |
| |
(a) | whether the member is acting in good faith in seeking to raise or |
| |
continue the proceedings (as the case may be), |
| 5 |
(b) | the importance that a person acting in accordance with section 158 |
| |
(duty to promote the success of the company) would attach to raising |
| |
or continuing them (as the case may be), |
| |
(c) | where the cause of action is an act or omission that is yet to occur, |
| |
whether the act or omission could be, and in the circumstances would |
| 10 |
| |
(i) | authorised by the company before it occurs, or |
| |
(ii) | ratified by the company after it occurs, |
| |
(d) | where the cause of action is an act or omission that has already |
| |
occurred, whether the act or omission could be, and in the |
| 15 |
circumstances would be likely to be, ratified by the company, |
| |
(e) | whether the company has decided not to raise proceedings in respect of |
| |
the same cause of action or to persist in the proceedings (as the case |
| |
| |
(f) | whether the cause of action is one which the member could pursue in |
| 20 |
his own right rather than on behalf of the company. |
| |
(3) | In considering whether to grant leave to raise derivative proceedings or an |
| |
application under section 250, the court shall have particular regard to any |
| |
evidence before it as to the views of members of the company who have no |
| |
personal interest, direct or indirect, in the matter. |
| 25 |
(4) | The Secretary of State may by regulations— |
| |
(a) | amend subsection (1) so as to alter or add to the circumstances in which |
| |
leave or an application is to be refused, |
| |
(b) | amend subsection (2) so as to alter or add to the matters that the court |
| |
is required to take into account in considering whether to grant leave or |
| 30 |
| |
(5) | Before making any such regulations the Secretary of State shall consult such |
| |
persons as he considers appropriate. |
| |
(6) | Regulations under this section are subject to affirmative resolution procedure. |
| |
252 | Application by member to be substituted for member pursuing derivative |
| 35 |
| |
(1) | This section applies where a member of a company (“the claimant”)— |
| |
(a) | has raised derivative proceedings, |
| |
(b) | has continued as derivative proceedings proceedings raised by the |
| |
| 40 |
(c) | has continued derivative proceedings under this section. |
| |
(2) | Another member of the company (“the applicant”) may apply to the court to be |
| |
substituted for the claimant in the action on the ground that— |
| |
(a) | the manner in which the proceedings have been commenced or |
| |
continued by the claimant amounts to an abuse of the process of the |
| 45 |
| |
|
| |
|
| |
|
(b) | the claimant has failed to prosecute the proceedings diligently, and |
| |
(c) | it is appropriate for the applicant to be substituted for the claimant in |
| |
| |
(3) | If it appears to the court that the application and the evidence produced by the |
| |
applicant in support of it do not disclose a prima facie case for granting it, the |
| 5 |
| |
(a) | must refuse the application, and |
| |
(b) | may make any consequential order it considers appropriate. |
| |
(4) | If the application is not refused under subsection (3)— |
| |
(a) | the applicant must serve the application on the company, |
| 10 |
| |
(i) | may make an order requiring evidence to be produced by the |
| |
| |
(ii) | may adjourn the proceedings on the application to enable the |
| |
evidence to be obtained, and |
| 15 |
(c) | the company is entitled to take part in the further proceedings on the |
| |
| |
(5) | On hearing the application, the court may— |
| |
(a) | grant the application on such terms as it thinks fit, |
| |
(b) | refuse the application, or |
| 20 |
(c) | adjourn the proceedings on the application and make such order as to |
| |
further procedure as it thinks fit. |
| |
| |
| |
| 25 |
253 | Private company not required to have secretary |
| |
(1) | A private company is not required to have a secretary. |
| |
(2) | In the case of a private company— |
| |
(a) | anything authorised or required to be given or sent to, or served on, the |
| |
company by being sent to its secretary— |
| 30 |
(i) | may be given or sent to, or served on, the company itself, and |
| |
(ii) | if addressed to the secretary shall be treated as addressed to the |
| |
| |
(b) | anything else required or authorised to be done by or to the secretary |
| |
of the company may be done by or to— |
| 35 |
| |
(ii) | a person authorised generally or specifically in that behalf by |
| |
| |
254 | Public company required to have secretary |
| |
| A public company must have a secretary. |
| 40 |
|
| |
|