What does s.33 CA 2006 do?
It creates a statutory contract between the company and its members, allowing shareholders to enforce personal membership rights.
When can a shareholder use a personal action under s.33?
When rights such as voting, notice of meetings, dividends (if declared), or access to information are infringed.
What case confirms that voting rights are personal property rights?
Pender v Lushington (1877).
What case confirms that Articles must be followed when paying dividends?
Wood v Odessa Waterworks (1889).
What is the proper claimant rule in Foss v Harbottle?
Only the company may sue for wrongs done to it.
What is the majority rule principle?
Courts will not interfere with internal management decisions approved by the majority.
What is the key exception for majority abuse?
Fraud on the minority — majority cannot ratify their own wrongdoing (Cook v Deeks).
What case shows that majority must act in good faith when issuing shares?
Clemens v Clemens Bros (1976).
What is the purpose of a derivative claim?
To allow a shareholder to sue on behalf of the company for wrongs done to the company.
What types of misconduct does s.260(3) cover?
Negligence, default, breach of duty, and breach of trust by directors.
What is the key question at the permission stage?
Whether a director acting under s.172 would continue the claim.
What case supports indemnity for minority shareholders bringing derivative claims?
Wallersteiner v Moir (No 2) [1975].
What must a shareholder show under s.994?
That the company’s affairs are conducted in a manner that is unfairly prejudicial to their interests.
What are common examples of unfair prejudice?
Exclusion from management, mismanagement, excessive remuneration, dilution, failure to provide information.
What case sets out the test for legitimate expectations?
O’Neill v Phillips (1999).
What is the most common remedy for unfair prejudice?
A buy‑out order at fair value.
When can a shareholder petition for winding up under s.122(1)(g)?
When it is just and equitable to wind up the company.
What situations justify winding up?
Deadlock, breakdown of mutual trust, exclusion in a quasi‑partnership.
What case is central to quasi‑partnership breakdown?
Ebrahimi v Westbourne Galleries (1973).
Why is winding up considered a last resort?
Courts prefer the more flexible remedy under s.994.
What does the reflective loss principle prevent?
Shareholders recovering losses that merely reflect losses suffered by the company.
What is the leading case on reflective loss?
Prudential Assurance v Newman Industries (No 2).
What case confirms the strictness of reflective loss?
Burnford v AA Developments (2022).
When does reflective loss NOT apply?
When the shareholder suffers a separate and distinct loss or is enforcing personal rights under s.33.
