Hogg v Cramphorn Ltd [1967] Ch 254
Citation:Hogg v Cramphorn Ltd [1967] Ch 254
Rule of thumb: What is the basic test for a minority shareholder raising an action against the board of directors? Minority shareholder actions against the company are generally based on 1 of these 3 grounds - (i) oppressive actions against them by the majority of shareholders, (ii) directors acting from a fiduciary position or from a conflict of interest, or (iii) breach of any express or implied term of the Articles of Association (the Court clarified that they are not there to assess the commercial merits of director decision making).
Judgment:
‘Unless a majority in a company is acting oppressively towards the minority, this court should not and will not itself interfere with the exercise by the majority of its constitutional rights or embark upon an inquiry into the respective merits of the views held or policies favoured by the majority and the minority. Nor will this court permit directors to exercise powers, which have been delegated to them by the company in circumstances which put the directors in a fiduciary position when exercising those powers, in such a way as to interfere with the exercise by the majority of its constitutional rights...’ Buckley J
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.