"11. ... in my judgment the Act is not seeking to change the basic rule that a claim that lies in a company can be pursued only by the company or to disturb the fundamental distinction between a company and its shareholders. There is nothing to suggest that the Act intended such a radical reversal of longstanding and fundamental principles. It is relevant that this part of the Act has its genesis in the Report of the Law Commission on Shareholder Remedies, Law Commission No. 246 (1997). That report states at the outset in paragraph 1.2: "
“(i ) Proper plaintiff Normally the Company should be the only party entitled to enforce a cause of action belonging to it. Accordingly, a member should be able to maintain proceedings about wrongs done to the Company only in exceptional circumstances.” 13. Although this part of the Act does not completely mirror the approach to be found in a combination of the Law Commission’s draft bill and draft procedure rules, it clearly reflects the overall approach in the Law Commission's proposal and, in my view, one would expect very different language in the Act if it were adopting such a radically different approach that involved discarding the Guiding Principle that I have quoted. Indeed, in the Act the governing provision for the grant of permission by the court to continue a derivative claim is section 261(4) which makes clear that this is a discretion resting in the court. 14. Whilst the discretion must, of course, be exercised in accordance with established principles, in my judgment this is one such principle. I would not go so far as to say that it could never be appropriate for a derivative claim to be brought by a shareholder holding the majority of the shares in a company. A judge must be cautious about using the word "never" when faced with a statutory discretion and when this is not one of the enumerated circumstances in section 263(2) in which permission must be refused.... But in my judgment, only in very exceptional circumstances could it be appropriate to permit a derivative claim brought by a shareholder in control of the company. For my part, I find it difficult to envisage what those exceptional circumstances might be.”
“There remains one final factor that is significant. Under the old law if there was no wrongdoer control of the company, permission would be refused for the obvious reason that in the circumstances there was no need for derivative proceedings to be commenced. It was submitted on behalf of the claimant that these principles do not appear in the statute and therefore are no longer relevant. I am doubtful if that is correct. If the statute is followed strictly, the court is required to consider whether a prima facie case is established - see section 261(2). In considering that question, the court is bound to have regard, not merely to the factors identified in Sections 263(3) and (4), but to any other relevant consideration since Sections 263(3) and (4) are not exhaustive. It is open to the first claimant to requisition an EGM, obtain if he can a replacement Board and that Board can if it judges it appropriate to do so, applying the duties imposed upon them by Sections 172, authorise the litigation. This factor is at least a powerful one that negatives the giving of permission and may be overwhelming.”
“Nor...can we endorse a rule that leave can only be granted where the directors whose breach of duty is in issue were and remain in majority control: in practice, that is likely to be the position in many cases where leave is appropriately granted, but, as we have explained, one of the objects of the 2006 Act was to introduce more flexible criteria than the former "fraud on the minority” exception to the rule in Foss v Harbottle. The common law requirement of “wrongdoer control”, in particular, had given rise to difficulty in a number of cases ... and is not repeated in s. 268.”