derivative claims

Question 1

what were the two rules outlined in foss v hartbottle?

Answer 1

• Wigram VC: prima facie the corporation should sue in its own name and in its corporate character
  
  • 1) the majority rule
  • 2) the proper plantiff rule

Question 2

what exceptions are there to the rule foss v hartbottle?

Answer 2

Edwards v Halliwell

• where the act complained of his wholly ultra vires
• fraud on the minority
• where the act complained of requires a special majority to be passed

Question 3

what are the problems with the old rule?

Answer 3

inflexible and outdated

Question 4

what were the government’s intention for the new regime?

Answer 4

• eliminate ‘wrong doer control’
• broaden ‘self-serving’ negligence
• restoring proper balance