What is the test for a shareholder to have a personal cause of action for a wrong done to the corporation?
British Columbia, Canada
The following excerpt is from EY Holdings Ltd. v. Great Pacific Mortgage & Investments Ltd., 2017 BCCA 405 (CanLII):
The rule in Foss v. Harbottle, (1843), 2 Hare 461, 67 E.R. 189 (Ch.), that a shareholder of a corporation does not have a personal cause of action for a wrong done to the corporation is one of the bedrock principles of corporate law. It has survived for more than 170 years with no significant modification, apart from the statutory provision of derivative actions to mitigate against the rigour of the rule.
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