A Study of Shareholders' Direct Actions-Centered on the Contract, Tort, and Statutory Remedies
Date Issued
2015
Date
2015
Author(s)
Chang, Ting-Wei
Abstract
The shareholders’ direct actions are the opposite of the shareholders’ derivative actions in theory, but the most tough problem is how to distinct and separate the shareholder’ personal interests from the company’s interest. The thesis divides shareholder’ personal interests into “interests vested by contract,” “pure economic interests,” and “legal rights”. Those three kinds of private interests are protected by contract, tort and statutory remedies, respectively. The contractual direct actions are most indisputable; however, without an express or a written contract, a dispute might occur whether there is an implied contract between the shareholder and the company, or between the shareholders. To solve this problem, it’s necessary for the courts to search and explain their legitimate expectations. On the other hand, because the shareholders’ agreements are common in corporate management, they are also an important source in shareholders’ direct actions. Nevertheless, our courts tend to be very conservative, denying the legal effect of shareholders’ agreements frequently. The shareholders’ pure economic interests are protected by tort. This thesis puts emphasis on the Civil Code s184 (1). The element of “the injury is done intentionally in a manner against the rules of morals” could be explained to include the shareholders’ fairness principle. Notwithstanding, due to the vagueness in s184 (1), it’s not easy for the courts to operate the concept of “the rules of morals” consistently. Moreover, the legal effect of s184 (1) is to compensate the victim’s injury, but monetary remedies, which may intensify the conflicts between members, are not suitable in group law. As a result, it’s not always proper to identify shareholders’ personal interests from the perspective of pure economic interests. The statutory remedies are centered on the Company Act. Due to the lack of integration in our Company Act, our law cannot provide shareholders effective remedies to avoid the unfair prejudice. This thesis suggests that our Company Act should be amended. With reference to the just and equitable winding-out and the unfair prejudicial remedies in UK law, we could amend our Company Act by adding s11-1, s11-2, and s11-3. Only in this way, injunctions and share purchase order can be the general remedy in shareholders’ direct actions, not limited to the monetary compensation.
Subjects
shareholders’ direct actions
Foss rule
unfair prejudice
reflective loss
legitimate expectations
injunction
appraisal right
Type
thesis
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ntu-104-R00A21093-1.pdf
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