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Bamford v Harvey and Another

The Times Law Reports Cited authorities 4 Cited in Precedent Map Related
Vincent
JurisdictionEngland & Wales
Judgment Date18 October 2012
Date18 October 2012
CourtChancery Division

Chancery Division

Before Mr Justice Roth

Bamford
and
Harvey and Another
Derivative claim inappropriate

It was not an absolute condition for the bringing of a derivative claim in the name of a company that the directors whose breach of duty was in issue were and remained in majority control. When proceedings clearly could be brought in the name of the company and there was no objection raised on that ground, they should be brought in the name of the company.

Mr Justice Roth so held in the Chancery Division on October 18, 2012, when refusing permission for a claim brought by Joseph Bamford against the defendants, John Henry Harvey and Avro Heritage Ltd, to continue as a derivative claim under Part 11 of the Companies Act 2006 and ordering it to be recon stituted as proceedings brought in the name of the second defendant company, under Part 7 of the Civil Procedure Rules.

The claimant and the first defendant were the sole directors of, and each a 50 per cent shareholder in, the company. The first defendant's objection to the action proceeding by way of derivative claim was not based on any of the grounds in section 263(2) or (3) of the Companies Act 2006, but on the ground that it was inappropriate as a matter of principle. Mr Daniel Lightman for the claimant; Mr David Casement, QC, for the defendant.

MR JUSTICE ROTH said that "wrongdoer control" of a company was not an absolute condition for the bringing of a derivative claim: if it were, it would be specified as such in section 263(2) of the Companies Act 2006.

The judgment of the Inner House of the Court of Session in Wishart v Castlecroft Securities LtdUNK ([2010] BCC 161) was of very strong persuasive authority and his Lordship would follow it. It was clearly desirable that the interpretation of the statutory provisions should be the sam e in England as in Scotland.

However nothing in the opinion in Wishart...

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