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Franbar Holdings Ltd v Patel

[2008] EWHC 1534 (Ch)

Case summary last updated at 23/01/2020 17:51 by the Oxbridge Notes in-house law team.

Judgement for the case Franbar Holdings Ltd v Patel

·       Relevant test under s. 263(3)(b) is that of a hypothetical director.
Ø  i.e. if such a person would not attach very much importance to pursuing claim, no leave granted.
·       Factors which hypothetical director would take into account include:
i)         Likelihood of claim being successful
-        i.e. if breaches of duty not obvious, would not bring claim
ii)        Ability of company to recover any damages awarded
iii)      Costs of proceedings
iv)      Damage to company’s reputation
·       Fact that C had alternative claim for unfair prejudice considered important to exercise of discretion under s.263(3)

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