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Airey v Cordell and Ors

The appropriate test for permission to bring a derivative claim was the view of a hypothetical and independent board of directors, and a court had not to assert its own view but merely be satisfied that such a board could take the decision that the minority shareholder applying for permission to proceed would like it to take.

8 September 2006

The claimant shareholder (R) applied for permission to amend the particulars of claim to plead a new claim and to continue derivative proceedings on behalf of the fifth and sixth defendant companies (H and N). R was a minority shareholder in H, and N was a wholly owned subsidiary of H. H and N were market leaders in the manufacture and sale of vehicle license plates and number plate components. Using radio frequency identification technology, H and N had developed a product known as "E-Plate", a registered trade mark of N, which allowed vehicles and their movements to be monitored. H and N had arranged to market the E-plate technology overseas and had expanded their operations to include the development of other electronic technology products. The first three defendants (D) were shareholders and directors in H. R was notified of a number of proposals concerning the creation of a new company, the fourth defendant (E), of which D would own the majority of the issued share capital, whi...

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