| 1) | Where a company has suffered damages or loss or has been deprived of any benefit as a result of any wrong, breach of trust or breach of faith committed by any director or officer of that company or by any past director or officer while he was a director or officer of that company and the company has not instituted proceedings for the recovery of such damages, loss or benefit, any member of the company may initiate proceedings on behalf of the company against such director or officer or past director or officer in the manner prescribed by this section notwithstanding that the company has in any way ratified or condoned any such wrong, breach of trust or breach of faith or any act or omission relating thereto. |
| a) | Any such member shall serve a written notice on the company calling on the company to institute such proceedings within one month from the date of service of the notice and stating that if the company fails to do so, an application to the Court under paragraph (b) will be made. |
| b) | If the company fails to institute such proceedings within the said period of one month, the member may make application to the Court for an order appointing a curator ad litem for the company for the purpose of instituting and conducting proceedings on behalf of the company against such director or officer or past director or officer. |
| 3) | The Court on such application, if it is satisfied- |
| a) | that the company has not instituted such proceedings; |
| b) | that there are prima facie grounds for such proceedings; and |
| c) | that an investigation into such grounds and into the desirability of the institution of such proceedings is justified, |
may appoint a provisional curator ad litem and direct him to conduct such investigation and to report to the Court on the return day of the provisional order.
| 4) | The Court may on the return day discharge the provisional order referred to in subsection (3) or confirm the appointment of the curator ad litem for the company and issue such directions as to the institution of proceedings in the name of the company and the conduct of such proceedings on behalf of the company by the curator ad litem, as it may think necessary and may order that any resolution ratifying or condoning the wrong, breach of trust or breach of faith or any act or omission in relation thereto shall not be of any force or effect. |
