Companies Act 1993

165 Derivative actions

• (1) Subject to subsection (3), the court may, on the application of a shareholder or director of a company, grant leave to that shareholder or director to—

  • (a) bring proceedings in the name and on behalf of the company or any related company; or

  • (b) intervene in proceedings to which the company or any related company is a party for the purpose of continuing, defending, or discontinuing the proceedings on behalf of the company or related company, as the case may be.

  (2) Without limiting subsection (1), in determining whether to grant leave under that subsection, the court shall have regard to—

  • (a) the likelihood of the proceedings succeeding:

  • (b) the costs of the proceedings in relation to the relief likely to be obtained:

  • (c) any action already taken by the company or related company to obtain relief:

  • (d) the interests of the company or related company in the proceedings being commenced, continued, defended, or discontinued, as the case may be.

  (3) Leave to bring proceedings or intervene in proceedings may be granted under subsection (1), only if the court is satisfied that either—

  • (a) the company or related company does not intend to bring, diligently continue or defend, or discontinue the proceedings, as the case may be; or

  • (b) it is in the interests of the company or related company that the conduct of the proceedings should not be left to the directors or to the determination of the shareholders as a whole.

  (4) Notice of the application must be served on the company or related company.

  (5) The company or related company—

  • (a) may appear and be heard; and

  • (b) must inform the court, whether or not it intends to bring, continue, defend, or discontinue the proceedings, as the case may be.

  (6) Except as provided in this section, a shareholder is not entitled to bring or intervene in any proceedings in the name of, or on behalf of, a company or a related company.