Can a majority shareholder of a corporation sue the directors of the corporation for personal losses?

24 The rule in Foss v. Harbottle (1843), 2 Hare 461; 67 E.R. 189 is essentially one preventing shareholders from suing directors of a corporation for a wrong done to the corporation if a majority of the shareholders had or could ratify the wrong. For such a wrong the corporation is, aside from specific statutory provision to the contrary, the only proper plaintiff. A number of common-law exceptions to the rule evolved to appease aggrieved minority shareholders for an unremedied wrong to the company. One of these exceptions involved where the "personal and individual rights of membership of the plaintiff have been invaded". Commentators have noted that this exception attempts to uphold the ever-ambiguous line between personal and derivative actions which is still neither clearly defined or settled. Nevertheless, because of the exception, it is apparent that, even if the rule were to apply to the facts in the case at bar, (as I find it does not), the rule will not prevent the plaintiff from bringing an action for personal losses.

25 In Foss v. Harbottle, the minority shareholders were prevented from suing directors of the corporation of which they were members for a wrong they alleged the directors did the company. It appears the rule prevents, in certain circumstances, minority shareholders from suing, on behalf of the company, the directors of the company in which they are shareholders. However, given the exception discussed above, those same shareholders may sue the directors for damage they incurred personally as a result of their "personal and individual rights of membership" being "invaded".