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These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  














Company - From: 1985 To: 1989

This page lists 73 cases, and was prepared on 02 April 2018.

 
C Evans and Sons Ltd v Spritebrand Ltd and another [1985] 1 WLR 316
1985
CA
Lord Justice Slade, Lord Justice Atkin
Company, Torts - Other
The court considered when a company director might be personally liable for acts of the company: "in order to make a director, other officer or employee of a company personally liable for the company's tort, it is necessary to show either that he was himself the person who committed, or participated in, the act constituting the tort, or that he directed or procured the tortious act to be done by others; and that inquiries into the matter will or may involve an "elusive question" turning on the particular facts of the case, and whose resolution may in turn involve the making of a policy decision as to the side of the line on which the case ought to fall." and "is it the law of England that a director of a company who has authorised, directed and procured the commission by the company of a tort of the nature specified in section 1(2) of the Copyright Act 1956 can in no circumstances be personally liable to the injured party unless he directed or procured the acts of infringement in the knowledge that they were tortious, or recklessly, not caring whether they were tortious or not?" (Lord Justice Slade)

and "If the directors themselves directed or procured the commission of the act they would be liable in whatever sense they did so, whether expressly or impliedly." but "Nevertheless, judicial dicta of high authority are to be found in English decisions which suggest that a director is liable for those tortious acts of his company which he has ordered or procured to be done." (Lord Justice Atkin)
Copyright Act 1956 1(2)
1 Citers


 
In re Highfield Commodities Ltd [1985] 1 WLR 149; [1984] BCLC 623
1985
ChD
Sir Robert Megarry V-C
Company, Insolvency
The court's discretion in appointing provisional liquidators is unfettered provided it is exercised in a "proper judicial manner". Sir Robert Megarry V-C said: 'I would respectfully express my complete agreement with the view taken by [the judge]. I do not think that the old authorities, properly read, had the effect of laying down any rule that the power to appoint a provisional liquidator is to be restricted in the way for which Mr Burke-Gaffney contends. No doubt a provisional liquidator can properly be appointed if the company is obviously insolvent or the assets are in jeopardy; but I do not think that the cases show that in no other case can a provisional liquidator be appointed over a company's objection . . Section238 . . is in quite general terms. I can see no hint in it that it is to be restricted to certain categories of cases. The section confers on the court a discretionary power, and that power must obviously be exercised in a proper judicial manner. The exercise of that power may have serious consequences for the company, and so a need for the exercise of the power must overtop those consequences" . . but in the case of a public interest petition, "the public interest must be given full weight".
The general practice is for an undertaking as to damages to be given upon an ex parte application for provisional liquidators, but such an undertaking would not be required on an inter partes application. A cross-undertaking as to damages might not be required where "The Secretary of State was seeking to enforce the law, or was acting selflessly in the performance of a public duty directly or impliedly imposed by statute . ."
Companies Act 1985
1 Cites

1 Citers


 
Nurcombe v Nurcombe [1985] 1 WLR 370
1985
CA
Browne-Wilkinson LJ, Lawton LJ
Company, Litigation Practice, Equity
The court discussed a minority shareholder's action to enforce the company's claim as a derivative claim. Browne-Wilkinson LJ said that such an action, where a courts in equity permitted a person interested to bring an action to enforce the company's claim, was analogous to that in which equity permitted a beneficiary under a trust to sue as plaintiff to enforce a legal right vested in trustees, which right the trustees will not themselves enforce, the trustees being joined as defendants.
He continued: 'Since the wrong complained of is a wrong to the company, not to the shareholder, in the ordinary way the only competent plaintiff in an action to redress the wrong would be the company itself. But, where such a technicality would lead to manifest injustice, the courts of equity permitted a person interested to bring an action to enforce the company's claim. The case is analogous to that in which equity permits a beneficiary under a trust to sue as plaintiff to enforce a legal right vested in trustees (which right the trustees themselves will not enforce), the trustees being joined as defendants. Since the bringing of such an action requires the exercise of the equitable jurisdiction of the court on the grounds that the interests of justice require it, the court will not allow such an action to be used in an inequitable manner so as to produce an injustice.'
. . And "It is pertinent to remember, however, that a minority shareholder's action in form is nothing more than a procedural device for enabling the court to do justice to a company controlled by miscreant directors or shareholders. Since the procedural device has evolved so that justice can be done for the benefit of the company, whoever comes forward to start the proceedings must be doing so for the benefit of the company and not for some other purpose. It follows that the court has to satisfy itself that the person coming forward is a proper person to do so."
Lawton LJ distinguished between actions brought for the benefit of the company on the one hand, and those brought for some other purpose on the other. He went on to say: "It is pertinent to remember, however, that a minority shareholder's action in form is nothing more than a procedural device for enabling the court to do justice to a company controlled by miscreant directors or shareholders. Since the procedural device has evolved so that justice can be done for the benefit of the company, whoever comes forward to start the proceedings must be doing so for the benefit of the company and not for some other purpose. It follows that the court has to satisfy itself that the person coming forward is a proper person to do so. In Gower, Modern Company Law, 4th ed (1979), the law is stated, in my opinion correctly, in these terms. . : 'The right to bring a derivative action is afforded the individual member as a matter of grace. Hence the conduct of a shareholder may be regarded by a court of equity as disqualifying him from appearing as plaintiff on the company's behalf. This will be the case, for example, if he participated in the wrong of which he complains.'"
1 Citers


 
In re Woodroffes (Musical Instruments) [1985] 2 All ER 908
1985

Nourse J
Company

1 Citers


 
Mutual Life Insurance Co of New York v Rank Organisation Ltd [1985] BCLC 11
1985

Goulding J
Company
The duty of loyalty of a director to his company is the "time-honoured" rule. The directors are under a duty to act fairly as between different shareholders. This applies not just where there were different classes of shareholder but also where shareholders of the same class had differing interests.
The directors' power of allotment was limited by two considerations only: "First, the time-honoured rule that the directors' powers are to be exercised in good faith in the interests of the company, and secondly, that they must be exercised fairly as between different shareholders. I doubt whether it is possible to formulate either of the stipulations more precisely because of the infinity of circumstances in which they may fall to be applied."
1 Citers



 
 Barton v Morris; 1985 - [1985] 1 WLR 1257
 
In re a Company [1985] BCLC 80; [1986] 2 BCC ChD 99
1985
ChD
Harman J
Company
While a section 75 petition proceeded it is of great importance to preserve the status quo, to hold the ring, to ensure that the assets remained undiluted, undiverted and properly administered; so that, if the court came to the conclusion, as it frequently does, or if the parties reached a sensible decision that one should buy out the other as a matter of compromise, the assets would be capable of specific valuation in much the same state as they had been before the breakdown had taken place. Harman J said: "in cases of litigation under section 75 it is most desirable that the position of the company be not altered or disturbed more than is absolutely essential, between the presentation and the hearing of the petition".
Companies Act 1980 75
1 Citers


 
Re a Company (No 007623 of 1986) [1986] BCLC 362
1986

Hoffmann J
Company
A petition sought relief for prejudicial conduct of the company by majority shareholders, where further shares had been issued and the petitioner had been unable to purchase them. Held. The petition was dismissed. Hoffmann J said: "Nevertheless, I do not think that the bona fides of the decision or the fact that the petitioner was offered shares on the same terms as other shareholders necessarily means that the rights issue could not have been unfairly prejudicial to his interests. If the majority know that the petitioner does not have the money to take up his rights and the offer is made at par when the shares are plainly worth a great deal more than par as part of a majority holding (but very little as a minority holding), it seems to me arguable that carrying through the transaction in that form could, viewed objectively, constitute unfairly prejudicial conduct."
1 Citers



 
 Regina v Take-over Panel, ex parte Datafin PLC; CA 1986 - [1987] 1 QB 815; [1986] 2 All ER 257; [1986] 1 WLR 763; (1986) 2 BCC 99086; [1986] EWCA Civ 8
 
Re a company (No.00477 of 1986) [1986] BCLC 376
1986

Hoffmann J
Company

1 Citers


 
In re Cumana Ltd (1986) BCC 99; [1986] BCLC 430
1986
CA
Lawton LJ, Glidewell LJ, Nicholls LJ
Company
The court considered the date at which shares are to be valued in a possible order for one set of shareholders to buy the shares of another. Held: The choice was a matter of the judge's discretion. Where a minority shareholder has a petition on foot and there is a general fall in the market, the court may in fairness to the claimant have the shares valued at an early date, especially if it strongly disapproves of the majority shareholder's prejudicial conduct.
Lawton LJ said: "the shares had gone down in value between the date of the petition and the date of judgment. They might have gone up. The reason which the judge gave, on the facts of this case, for choosing the date of the petition was a sound one, viz:
'The date of the petition is the date on which the petitioner elects to treat the unfair conduct of the majority as in effect destroying the basis on which he agreed to continue to be a shareholder, and to look to his shares for his proper reward for participation in a joint undertaking.'
I would stress, however, that the choice of a date for valuation in cases of this kind is a matter for the exercise of the trial judge's discretion. If, for example, there is before the court evidence that the majority shareholder deliberately took steps to depreciate the value of shares in anticipation of a petition being presented, it would be permissible to value the shares at a date before such action was taken."
Nicholls LJ said: "Counsel for Mr Bolton also attacked the judge's choice of valuation date, which was nearly a year before the date when he made his order. Prior to the hearing, Mr Lewis had offered his shares to Mr Bolton for £1,700,000, but he did not offer to sell them at their value at the date on which the petition was issued, and the price ought not to have been fixed at a date earlier than the date when it became apparent that the shares had to be sold. As it was, the price fixed by the judge was about £.25m more than the value of the shares at the time of the hearing. In my view, this attack also must fail. The choice of the valuation date was a matter for the judge's discretion. The reasons he gave for choosing the earlier date seem to me sufficient to support his conclusion on this, albeit the result was a severe form of order."
1 Citers


 
Re London School of Electronics [1986] Ch 211
1986

Nourse J
Company
The court considered its powers under the section: "The combined effect of sub-ss (1) and (3) is to empower the court to make such order as it thinks fit for giving relief, if it is first satisfied that the affairs of the company are being or have been conducted in a manner which is unfairly prejudicial to the interests of some part of the members. The conduct of the petitioner may be material in a number of ways, of which the two most obvious are these. First, it may render the conduct on the other side, even if it is prejudicial, not unfair: cf Re RA Noble & Sons (Clothing) Ltd [1983] BCLC 273. Second, even if the conduct on the other side is both prejudicial and unfair, the petitioner's conduct may nevertheless affect the relief which the court thinks fit to grant under sub-s (3). In my view there is no independent or overriding requirement that it should be just and equitable to grant relief or that the petitioner should come to the court with clean hands."
Companies Act 1985 461(1)
1 Citers



 
 In re Bird Precision Bellows Ltd; CA 1986 - [1986] Ch 658; [1985] 3 All ER 523
 
Rolled Steel Products (Holdings) Ltd v British Steel Corporation and Others [1986] Ch 246
1986
CA
Slade LJ, Browne-Wilkinson LJ
Company, Litigation Practice
The plaintiff company had guaranteed borrowings, using powers within the memorandum of association, but for purposes which were held to be improper, because they were not in the interests of the plaintiff company itself. One issue was whether the receiver of the company could assert the invalidity of the transactions as against the defendant companies who had been party to the proposals, and had full knowledge that they were "not entered into by the plaintiff for any purpose of the plaintiff but were a gratuitous disposition of the property of the plaintiff". Complaint was also made as to the judge's eight month delay in handing down his judgment. Held: The court related six principles: "(1) The basic rule is that a company incorporated under the Companies Acts only has the capacity to do those acts which fall within its objects as set out in its memorandum of association or are reasonably incidental to the attainment or pursuit of those objects. Ultimately, therefore, the question whether a particular transaction is within or outside its capacity must depend on the true construction of the memorandum. (2) Nevertheless, if a particular act (such as each of the transactions of 22 January 1969 in the present case) is of a category which, on the true construction of the company’s memorandum, is capable of being performed as reasonably incidental to the attainment or pursuit of its objects, it will not be rendered ultra vires the company merely because in a particular instance its directors, in performing the act in its name, are in truth doing so for purposes other than those set out in its memorandum. Subject to any express restrictions on the relevant power which may be contained in the memorandum, the state of mind or knowledge of the persons managing the company’s affairs or of the persons dealing with it is irrelevant in considering questions of corporate capacity. (3) While due regard must be paid to any express conditions attached to or limitations on powers contained in a company’s memorandum (e.g. a power to borrow only up to a specified amount), the court will not ordinarily construe a statement in a memorandum that a particular power is exercisable “for the purposes of the company” as a condition limiting the company’s corporate capacity to exercise the power; it will regard it as simply imposing a limit on the authority of the directors: see the David Payne case [1904] 2 Ch 608. (4) At least in default of the unanimous consent of all the shareholders (as to which see below), the directors of a company will not have actual authority from the company to exercise any express or implied power other than for the purposes of the company as set out in its memorandum of association. (5) A company holds out its directors as having ostensible authority to bind the company to any transaction which falls within the powers expressly or impliedly conferred on it by its memorandum of association. Unless he is put on notice to the contrary, a person dealing in good faith with a company which is carrying on an intra vires business is entitled to assume that its directors are properly exercising such powers for the purposes of the company as set out in its memorandum. Correspondingly, such a person in such circumstances can hold the company to any transaction of this nature. (6) If, however, a person dealing with a company is on notice that the directors are exercising the relevant power for purposes other than the purposes of the company, he cannot rely on the ostensible authority of the directors and, on ordinary principles of agency, cannot hold the company to the transaction."
Lawton LJ discussed the proper approach where it was questioned whether a case was being run on the pleadings: "I wish however to add a comment about the pleading points which have had to be considered in this appeal. From the way they were raised by counsel and dealt with by the trial judge, I was left with the impression that neither the judge nor defending counsel appreciated as fully as they should have done the need for precision and expedition when dealing with pleading points.
My recent experience in this court shows that some counsel and judges are not giving pleadings the attention which they should. Pleadings are formal documents which have to be prepared at the beginning of litigation, they are essential for the fair trial of an action and the saving of time at trial. The saving of time keeps down the costs of litigation. A plaintiff is entitled to know what defences he has to meet and the defendant what claims are being made against him. If the parties do not know, unnecessary evidence may be got together and led or, even worse, necessary evidence may not be led.
Pleadings regulate what questions may be asked of witnesses in cross-examination. When counsel raises an objection to a question or a line of questioning, as Mr Morritt did on a number of occasions, the trial judge should rule on it at once. He should not regard the objection as a critical commentary on what the other side is doing. If the judge does not rule, counsel should ask him to do so. If a line of questioning is stopped because it does not relate to an issue on the pleadings, counsel should at once consider whether his pleadings should be amended. If he decides that they should, he should forthwith apply for an amendment and should specify precisely what he wants and the judge should at once give a ruling on the application. The principles upon which amendments should be allowed are well known and are set out in the current edition of the Supreme Court practice."
1 Citers



 
 Armour Glass v Mundo Gas SA; HL 1986 - [1986] AC 717

 
 Island Export Finance v Umunna; ChD 1986 - [1986] BCLC 460

 
 Winkworth v Edward Baron Development Co Ltd; HL 1986 - [1986] 1 WLR 1512
 
Precision Dippings Ltd v Precision Dippings Marketing Ltd [1986] 1 Ch 447
1986

Dillon L.J, Sir Edward Eveleigh
Company
The claimant had paid a dividend to its parent company. The claimant's case was that the payment was in contravention of sections 39 and 43 of the Companies Act 1980, as there were no available profits at the time, and so were ultra vires the claimant. It sued the parent company and the two directors (Mr Wynne-Jones and Mr King), and sought summary judgment. The directors said, and for the purposes of the appeal it was accepted, that at the time of payment of the dividend they were not aware of the relevant requirements of the Companies Act 1980. They also said, and again it was accepted for the purposes of the appeal, that they were advised by the company's auditors that the sum paid by way of dividend could be paid by way of dividend so long as the dividend was paid by way of available profits. At the time of the appeal the position was that the claimant accepted that the directors should have unconditional leave to defend the claim; the appeal was only against that part of the Judge's order by which Precision Dippings Marketing Ltd had been given unconditional leave to defend. Repayment was sought under section 44(1) of the 1980 Act. Held: As to the position of the directors under section 44(1), Dillon LJ: "There can be no doubt that because Mr Wynne-Jones and Mr King were the only shareholders in and directors of Marketing and were also the only directors of the company, Marketing must be taken to have known all the facts. But it did not in fact know the terms of sections 39 and 43."
Companies Act 1980 39 43 44(1)
1 Citers


 
Jaybird Group Ltd v Greenwood [1986] BCLC 319
1986

Mr Michael Wheeler QC
Company
An indemnity as to costs in a derivative claim is not limited to impecunious claimants. The justification for the indemnity is that the claimant brings his claim for the benefit of the company. Once the court has reached the conclusion that the claim ought to proceed for the benefit of the company, it ought normally to order the company to indemnify the claimant against his costs.
1 Citers


 
Tett v Phoenix Property and Investment Co Ltd [1986] BCLC 149
1986


Company
Because articles of association are business documents, they should be construed in a manner tending to business efficacy and, if necessary, terms will be implied in the articles in order to make them work

 
Kinsela v Russell Kinsela Pty Ltd (In Liq) (1986) 4 NSWLR 722; (1986) 4 ACLC 215; 10 ACLR 395
1986

Street CJ, Hope and McHugh JJA
Company, Commonwealth
(New South Wales) If directors act in a way to promote their own interest or promote the private interest of others, they have not acted in the best interests of the company.
Street CJ said: 'In a solvent company the proprietary interests of the shareholders entitle them as a general body to be regarded as the company when questions of the duty of directors arise. If, as a general body, they authorise or ratify a particular action of the directors, there can be no challenge to the validity of what the directors have done. But where a company is insolvent the interests of the creditors intrude. They become prospectively entitled, through the mechanism of liquidation, to displace the power of the shareholders and directors to deal with the company's assets. It is in a practical sense their assets and not the shareholders' assets that, through the medium of the company, are under the management of the directors pending either liquidation, return to solvency, or the imposition of some alternative administration.'
1 Citers


 
Charterhouse Investment Trust Ltd v Tempest Diesels Ltd [1986] BCLC 1
1986
ChD
Hoffmann J
Company
When looking at transactions challenged under the Act, the court must look to the 'commercial realities' of what had taken place. "There is no definition of giving financial assistance in the Section although some examples are given. The words have no technical meaning and their frame of reference is in my judgment the language of ordinary commerce. One must examine the commercial realities of the transaction and decide whether it can properly be described as the giving of financial assistance by the company bearing in mind that the section is a penal one and should not be strained to cover transactions which are not fairly within it "
Companies Act 1985 54
1 Citers


 
Smith v Croft [1986] 1 WLR 580; [1986] 2 All ER 551; [1986] BCLC 207
1986
ChD
Walton J
Company
Walton J was concerned with two appeals from the Master. The first appeal was from an order made ex parte ordering the company to indemnify the claimant against costs. The appeal against that order was allowed, and Walton J decided that there was so little substance in the claim that no indemnity was appropriate. The second appeal was against an order permitting the claimants to tax their bills at intervals, without waiting for the outcome of the action.
Walton J expressed concern at the implications of a minority shareholder being permitted to litigate at the expense of the company. He said: "It is, of course, not for me to question the correctness of the decision of the Court of Appeal in Wallersteiner v Moir (No. 2), but I may observe that the justice of an order which may throw upon a company which, in the event, is proved to have no cause of action whatsoever against the other defendants, who may prove to be completely blameless, the entire costs of an action which it did not wish to be prosecuted, is extremely difficult to comprehend. The real injustice of the situation lies in the encouragement which the Court of Appeal gave to the application for such an order being made at the commencement of the action, at a time when, of necessity, the plaintiffs believe that they have a good case, and will with hand on heart swear that they have, and before the completion of discovery and inspection, which may well show that their beliefs, though honestly enough held, are not in fact well founded. It is to be observed that in Wallersteiner v Moir (No. 2) the application was made at a late stage in the proceedings, after Mr. Moir (who was the plaintiff by counterclaim) had already substantially succeeded, but who had no powder and shot left to finish the battle. The manifest justice of such an order in favour of a person in such a position is plain enough."
As to the second appeal: "Early payment - i.e. before the conclusion of the trial - does indeed impose an additional liability. That may become necessary: if, for example, the plaintiff is a person who literally has no resources of his own, then it may well be that an order for interim payment should be made in order to ensure that the action proceeds at all. Without the supplementary order, the original order may stand in danger of being stultified.
It therefore appears to me that in order to hold the balance as fairly as may be in the circumstances between plaintiffs and defendants, it will be incumbent on the plaintiffs applying for such an order to show that it is genuinely needed, i.e. that they do not have sufficient resources to finance the action in the meantime. If they have, I see no reason at all why this extra burden should be placed upon the company."
1 Cites

1 Citers


 
Bank of Tokyo Ltd v Karoon (Note) [1987] AC 45; [1986] 3 All ER 468; [1986] 3 WLR 414
1986

Robert Goff LJ
Company
Robert Goff LJ considering a request for an anti-suit ijunction, said: "foreign proceedings are to be viewed as vexatious or oppressive only if there is nothing which can be gained by them over and above what may be gained in local proceeding". He went on to say: "Counsel suggested beguilingly that it would be technical for us to distinguish between parent and subsidiary company in this context; economically, he said, they were one. But we are concerned not with economics but with law. The distinction between the two is, in law, fundamental and cannot here be bridged."
1 Citers



 
 Cornhill Insurance plc v Improvement Services Ltd; 1986 - [1986] 1 WLR 1; [1986] BCLC 26
 
Smith v Croft (No 3) [1987] BCLC 355
1987
ChD
Knox J
Company
Knox J said: "Ultimately the question which has to be answered in order to determine whether the rule in Foss v. Harbottle applies to prevent a minority shareholder seeking relief as plaintiff for the benefit of the company is, "Is the plaintiff being improperly prevented from bringing these proceedings on behalf of the company?" If it is an expression of the corporate will of the company by an appropriate independent organ that is preventing the plaintiff from prosecuting the action he is not improperly but properly prevented and so the answer to the question is, "No". The appropriate independent organ will vary according to the constitution of the company concerned and the identity of the defendants who will in most cases be disqualified from participating by voting in expressing the corporate will.
Finally on this aspect of the matter I remain unconvinced that a just result is achieved by a single minority shareholder having the right to involve a company in an action for recovery of compensation for the company if all the other minority shareholders are for disinterested reasons satisfied that the proceedings will be productive of more harm than good. If Mr. Potts' argument is well founded once control by the defendants is established the views of the rest of the minority as to the advisability of the prosecution of the suit are necessarily irrelevant. I find that hard to square with the concept of a form of pleading originally introduced on the ground of necessity alone in order to prevent a wrong going without redress."
1 Cites

1 Citers


 
in Re Kenyon Swansea Ltd [1987] BCLC 514
1987
ChD
Vinelott J
Company
Vinelott J said: "There is . . one matter that has given me considerable concern. At a meeting of the board of directors of the company . . it was resolved to instruct solicitors to act on behalf of the company. In reliance on that resolution solicitors retained by the company have incurred considerable expense in filing evidence and instructing counsel to oppose this application. I can see no possible justification for this course. The directors no doubt have very strong feelings as to the person they would like to see in control of the company and able to appoint and remove its directors including themselves. But they are not entitled at the expense of the company to take part in a dispute as to whether Mr Kenyon's shares should be compulsorily acquired by Mr Mitchell or by the company."
1 Citers


 
Arif v Excess Insurance Group Ltd 1987 SLT 473
1987


Company

1 Citers



 
 Re a company (No 003843 of 1986); 1987 - [1987] BCLC 562
 
Re a Company [1987] 1 BCLC 82
1987


Company

1 Citers



 
 Byblos Bank SAL v Al-Khudhairy; CA 1987 - [1987] BCLC 232

 
 House of Fraser plc v ACGE Investments Limited; HL 1987 - [1987] 1 AC 387
 
Re International Tin Council [1987] Ch 419
1987
ChD
Millet J
Company, Insolvency, Jurisdiction
An order for the winding up of a foreign company operates universally, applies to all the foreign company's assets and brings into play the full panoply of powers and duties under the Insolvency Act 1986 like any other winding up order. Millett J said: "The statutory trusts extend to [foreign] assets, and so does the statutory obligation to collect and realise them and to deal with their proceeds in accordance with the statutory scheme."
The court said that it was to ask the question, "Could Parliament reasonably have intended that the International Tin Council should be subject to the winding-up process of the UK insolvency legislation?"
Millet J said of the nature of corporate insolvency: "Although a winding up in the country of incorporation will normally be given extra-territorial effect, a winding up elsewhere has only local operation. In the case of a foreign company, therefore, the fact that other countries, in accordance with their own rules of private international law, may not recognise our winding up order or the title of a liquidator appointed by our courts, necessarily imposes practical limitations on the consequences of the order. But in theory the effect of the order is world-wide. The statutory trusts which it brings into operation are imposed on all the company's assets wherever situate, within and beyond the jurisdiction. Where the company is simultaneously being wound up in the country of its incorporation, the English court will naturally seek to avoid unnecessary conflict, and so far as possible to ensure that the English winding up is conducted as ancillary to the principal liquidation. In a proper case, it may authorise the liquidator to refrain from seeking to recover assets situate beyond the jurisdiction, thereby protecting him from any complaint that he has been derelict in his duty. But the statutory trusts extend to such assets, and so does the statutory obligation to collect and realise them and to deal with their proceeds in accordance with the statutory scheme."
1 Citers


 
In Re Dawson Print Group Ltd [1987] 3 BCC 322
1987

Hoffmann J
Company
Proof of dishonesty in a company director is not a strict requirement before a disqualification can be ordered. Hoffmann J said: "There must, I think, be something about the case, some conduct which if not dishonest is at any rate in breach of standards of commercial morality, or some really gross incompetence which persuades a court that it would be a danger to the public if he were to be allowed to continue to be involved in the management of companies, before a disqualification order is made."
1 Citers


 
Tay Bok Choon v Tahanson Sdn Bhd [1987] 1 WLR 413; [1987] BCLC 472
1987
PC
Lord Templeman
Company, Commonwealth, Evidence, Litigation Practice
A participant in the company was given the right to be involved in the management until a change should become necessary for some other reason.
In cases of fraud, direct evidence may be rare and circumstantial evidence may have to suffice,
Lord Templeman said: "In civil proceedings the trial judge has no power to dictate to a litigant what evidence he should tender. In winding up proceedings the trial judge cannot refuse to read affidavits which have been properly sworn, filed and produced to him unless some opposing party has applied for the attendance for cross-examination of the deponent and that application has been granted and the deponent does not attend. The court cannot give a direction about evidence unless one of the litigants desires such direction to be made. Of course a judge may indicate to a petitioner that unless he calls oral evidence or applies to cross-examine the deponents of the opposition so as to prove a disputed fact, his petition is likely to fail. The judge may equally indicate to a respondent that unless he calls oral evidence or applies to cross-examine the petitioner's deponents for the purposes of disproving an allegation made by the petitioner, then the petitioner is likely to succeed. At the end of the day the judge must decide the petition on the evidence before him. If allegations are made in affidavits by the petitioner and those allegations are credibly denied by the respondent's affidavits, then in the absence of oral evidence or cross-examination, the judge must ignore the disputed allegations. The judge must then decide the fate of the petition by consideration of the undisputed facts.
1 Citers


 
In re Keypak Homecare Ltd [1987] BCLC 409
1987
ChD
Millett J
Insolvency, Company
The court considered an application under section 108 to remove the liquidator, and reviewed the case law on the topic: 'The section authorises the court to remove the liquidator 'on cause shown'. That is not the same as saying 'if the court shall think fit'. There is a burden on the applicant to show why the liquidator should be removed.' However, the words of the statute are very wide, and it would be dangerous and wrong for a court to seek to limit or define the kind of cause required; and it may be appropriate to remove a liquidator even though nothing can be said against him, either personally or in his conduct of the particular liquidation.
Insolvency Act 1986 108
1 Cites

1 Citers


 
In re Brightlife Ltd [1987] 1 Ch 200; [1988] VLY 306
1987
ChD
Hoffmann J
Insolvency, Banking, Company
A clause in a debenture gave a charge which provided that the chargor should not: "deal with its book or other debts or securities for money otherwise than in the ordinary course of getting in and realising the same which expression shall not authorise the selling, factoring or discounting . . of its book debts or other negotiable instruments" Held: Whilst purporting to create a fixed charge over present and future book debts and imposing restrictions on the sale, factoring or discounting of book debts, the debenture did not require the chargor to pay them into an account with the chargee. Reference to a "first specific charge" over book debts had to yield to the only conclusion from the rights in fact granted that the charge over book debts was a floating charge only.
Hoffmann J said: "But a floating charge is consistent with some restriction upon the company's freedom to deal with its assets. For example, floating charges commonly contain a prohibition upon the creation of other charges ranking prior to or pari passu with the floating charge. Such dealings would otherwise be open to a company in the ordinary course of its business." and
"I do not think that the bank balance falls within the term "book debts or other debts" as it is used in the debenture. It is true that the relationship between banker and customer is one of debtor and creditor. It would not therefore be legally inaccurate to describe a credit balance with a banker as a debt. But this would not be a natural usage for a businessman or accountant. He would ordinarily describe it as "cash at bank": compare the balance sheet formats in Part I, section B of Schedule 4 to the Companies Act 1985" and "In this debenture, the significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge."
The significant feature of the Brightlife debenture was that the company was free to collect its debts and pay the proceeds into its bank account: "Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge."
The company had given a charge over its book debts to te bank. The bank asserted that it was a first specific charge and purported to restrict the company's right to factor its debts without the bank's consent. A debenture holder then gave notice to fix the charge, but only a week before a voluntary winding up resolution. Held: The charge on the book debts was a floating charge, and having crystallised a week before, it had priority over the other debts.
Although clause 3(A)(ii)(a) referred to a 'first specific charge' over book debts and others, 'the rights over the debts created by the debenture were in my judgment such as to be categorised in law as a floating charge.' . . And a "significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge . . I do not think that it is open to the courts to restrict the contractual freedom of parties to a floating charge on such grounds. The floating charge was invented by Victorian lawyers to enable manufacturing and trading companies to raise loan capital on debentures . . without inhibiting its ability to trade. . The public interest requires a balancing of the advantages to the economy of facilitating the borrowing of money against the possibility of injustice to unsecured creditors . . arguments for and against the floating charge are matters for Parliament rather than the courts."
1 Cites

1 Citers


 
Whitehouse v Carlton House Pty [1987] HCA 11; (1987) 162 CLR 285
7 Apr 1987

Mason (1), Wilson (2), Brennan (3), Deane (1) and Dawson (1) JJ
Company
High Court of Australia - Companies - Shares - Issue and allotment - Powers of directors - Bona fides of exercise - Ulterior purpose - Article vesting powers of directors in named governing director - Issue and allotment of shares by governing director to provide for control after his death - Articles requiring new shares to be offered to existing shareholders - Application to allotment of part of original capital.
Companies - Directors - Statutory requirement for more than one director - Powers of directors vested in governing director - Whether conflict with statute - Companies Act 1961 (Q), s. 114.
"As a matter of logic and principle, the preferable view would seem to be that, regardless of whether the impermissible purpose was the dominant one or but one of a number of significantly contributing causes, the allotment will be invalidated if the impermissible purpose was causative in the sense that, but for its presence, 'the power would not have been exercised'."
1 Citers

[ Austlii ]
 
Van Gestel v Can 1987 CLY 454; Times, 07 August 1987
7 Aug 1987
CA

Company
Directors have a positive duty to disclose their pre-existing breaches of fiduciary duty.
1 Citers


 
British-American Tobacco Company Ltd and R J Reynolds Industries Inc v Commission of the European Communities Joined Cases 142 and 156/84; C-142/84
17 Nov 1987
ECJ

European, Company, Judicial Review, Commercial
Europa An investigation carried out by the commission in fulfilment of its duty to ensure that the rules on competition are observed does not constitute adversary proceedings between companies which have submitted an application under article 3 of regulation no 17/62, having shown that they have a legitimate interest in seeking an end to the alleged infringement, and companies which are the object of the investigation. Although complainants must be given the opportunity to defend their legitimate interests during the administrative proceedings and the commission must consider all the matters of fact and of law which they bring to its attention, their procedural rights are not as far-reaching as the right to a fair hearing of the companies which are the object of the commission' s investigation, and the limits of such rights are reached where they begin to interfere with those companies' rights to a fair hearing. The obligation of professional secrecy laid down in article 214 of the treaty and article 20*(2) of regulation no 17/62 is mitigated in regard to complainants, but they may not in any circumstances be provided with documents containing business secrets. The legitimate interests of complainants are fully protected where they are informed of the outcome of the confidential negotiations between the commission and the companies which are the object of its investigation with a view to bringing the agreements or practices complained of into conformity with the rules laid down in the treaty; the right of the commission and those companies to enter into confidential negotiations would be imperilled if the complainants were given the right to attend such negotiations or be kept informed of the progress made in order to submit their observations on the proposals put forward by one party or the other.
2. Where the acquisition of shares in a competing company is the subject-matter of agreements entered into by companies which remain independent after the entry into force of the agreements, the issue must first be examined from the point of view of article 85 of the treaty. Although the acquisition by one company of an equity interest in a competitor does not in itself constitute conduct restricting competition, such an acquisition may nevertheless serve as an instrument for influencing the commercial conduct of the companies in question so as to restrict or distort competition on the market on which they carry on business. That would be true in particular where, by the acquisition of a shareholding or through subsidiary clauses in the agreement, the investing company obtains legal or de facto control of the commercial conduct of the other company or where the agreement provides for commercial cooperation between the companies or creates a structure likely to be used for such cooperation, or where the agreement gives the investing company the possibility of reinforcing its position at a later stage and taking effective control of the other company. Every agreement must be assessed in its economic context and in particular in the light of the situation on the relevant market. Where the companies concerned are multinational corporations which carry on business on a worldwide scale, their relationships outside the community cannot be ignored, and it is necessary in particular to consider the possibility that the agreement in question may be part of a policy of global cooperation between them. The commission must exercise particular vigilance in the case of a stagnant and oligopolistic market, such as that for cigarettes.
3. Although as a general rule the court undertakes a comprehensive review of the question whether or not the conditions for the application of article 85*(1) of the treaty are met, its review of the commission' s appraisals of complex economic matters is necessarily limited to verifying whether the relevant rules on procedure and on the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of appraisal or a misuse of powers.
4. The acquisition by one company of a shareholding in a competing company can constitute an abuse of a dominant position within the meaning of article 86 of the treaty only where that shareholding results in effective control of the other company or at least in some influence on its commercial policy.
5. Where the commission rejects an application pursuant to article 3 of regulation no 17/62, it need only state the reasons for which it did not consider it possible to hold that an infringement of the rules on competition had occurred, and it is not obliged to explain any differences in relation to the statement of objections, since that is a preparatory document containing assessments which are purely provisional in nature and are intended to define the scope of the administrative proceedings with regard to the companies against which they are brought, or to discuss all the matters of fact and of law which may have been dealt with during the administrative proceedings.

 
Movitex v Bulfield [1988] BCLC 104
1988
ChD
Vinelott J
Company
The court considered a company's articles of association which excused a director taking an interest in a contract with the company. The court treated the general exclusion of the self-dealing rule in the Articles as subject to the duty of the director to declare his interest in a transaction to be entered into by the company. The self-dealing rule was not excluded by the Articles, if the director’s interest was not disclosed in accordance with the Articles. The burden lies on the director to show that he made the necessary declaration. Vinelott J said: "a patch may be intentionally larger than the visible hole to which it is applied."
1 Citers


 
Re Bath Glass Ltd [1988] BCLC 329
1988
CA
Peter Gibson J
Company
A requirement that the court must have regard "in particular" to the matters listed in a schedule means that the court is not confined to looking at those matters. "To reach a finding of unfitness the court must be satisfied that the director has been guilty of a serious failure or serious failures, whether deliberately or through incompetence, to perform those duties of directors which are attendant on the privilege of trading through companies with limited liability. Any misconduct of a director qua director may be relevant, even though it does not fall within a specific section of the Companies Act or the Insolvency Act."
Company Director Disqualification Act 1985
1 Citers


 
West Mercia Safetywear Ltd v Dodds [1988] BCLC 250; [1988] BCC 30
1988
CA
Dillon LJ, Croom-Johnson LJ and Caulfield J
Company, Insolvency
If a company continues to trade whilst insolvent but in the expectation that it would return to profitability, it should be regarded as trading not for the benefit of the shareholders, but for the creditors also. If there is a possibility of insolvency, even a written consent will not totally safeguard against a claim from a liquidator.
1 Cites

1 Citers


 
Re Geers Gross plc [1988] 1 All ER 224; [1988] BCLC 140
1988
CA
Nourse LJ
Company
Nourse LJ said: "the clear purpose of [Pt VI of the 1985 Act] is to give a public company, and ultimately the public at large, a prima facie unqualified right to know who are the real owners of its voting shares."
Companies Act 1985
1 Citers



 
 Brady v Brady; HL 1988 - [1989] AC 755; [1988] 2 WLR 1308; [1988] BCLC 20; (1988) 3 BCC 535; [1988] 2 All ER 617
 
Guinness plc v Saunders [1988] 1 WLR 863
1988
CA

Company

Companies Act 1985 317
1 Citers


 
Re: A Company (No. 005009 of 1987), ex parte Copp [1989] BCLC 13; (1988) 4 BCC 424
1988
ChD
Knox J
Company
MC Bacon Ltd had borrowed money from a bank. The loan was unsecured. The company got into financial difficulty. The bank commissioned a report on the company's financial affairs; and insisted on the grant of a debenture to secure the company's borrowings. The report made various recommendations, which the company implemented. The company subsequently went into liquidation; and the liquidator alleged that the fact that the board of directors had acted on the bank's recommendations, led to the conclusion that the bank had become a shadow director of the company, and was consequently liable for wrongful trading. The bank applied to strike out the claim on the ground that it was obviously unsustainable. Knox J refused the application and allowed the claim to go to trial. However, Knox J declined to give any reasons for his conclusion on the ground that to do so would embarrass the trial judge. It was contended that a debenture in Siebe Gorman form did not create a fixed charge and a declaration to that effect was sought. The bank relied upon Siebe Gorman and Re Brightlife Ltd. The judge concluded that the latter did not cast any doubt on the correctness of the former and rejected both grounds for distinguishing Siebe Gorman suggested by counsel for the liquidator. The contention was rejected: "It seems to me that the indications are to the contrary effect, because this is a type of transaction in respect of which judicial precedent is a particularly valuable guide to the commercial adviser. It is one of the main justifications for the doctrine of precedent that the adviser can, if he can rely on precedent, give reliable advice to his clients and it is trite law that is a particularly cogent consideration in regard to property transactions of one sort or another. The inference I draw from the very close correspondence between the phrases used in the Siebe Gorman case and those used in the document in the present case is that the parties intended to produce the same known result. I therefore see no strength in the first point of distinction between the two cases." and "Although . . . Siebe Gorman is a decision of a judge at first instance and is therefore technically not absolutely binding on me, the views which I have expressed about the value of precedents in this particular class of work make it clear that it would be quite wrong for me, even if I thought (as I do not) that there was some error or flaw in the reasoning in the Siebe Gorman case, to decline to follow it."
1 Cites

1 Citers


 
Smith v Croft (No 2) [1988] Ch 114
1988


Company

1 Cites

1 Citers


 
Regina v McHugh (1988) 88 Cr App R 385
1988
CACD

Crime, Company
In cases alleging corporate fraud it is necessary to look very carefully at the nature and limits of the authority before considering whether the questioned transaction is in truth a transaction authorised by the company.
Theft Act 1968
1 Citers


 
In re Lo-Line Electric Motors Ltd [1988] Ch 477; [1988] 2 All ER 692; [1988] BCLC 698; [1988] 3 WLR 26
1988

Sir Nicolas Browne-Wilkinson VC
Company
When considering the filing of additional evidence changing allegations made under the 1986 Act, the paramount requirement is that the director facing disqualification must know the charge he has to meet. As to the standard of misbehaviour required to found an order, Sir Nicolas Browne-Wilkinson VC said: "Ordinary commercial misjudgment is in itself not sufficient to justify disqualification. In the normal case, the conduct complained of must display a lack of commercial probity, although I have no doubt in an extreme case of gross negligence or total incompetence disqualification could be appropriate." The director "has been shown to have behaved in a commercially culpable manner in trading through limited companies when he knew them to be insolvent and in using the unpaid Crown debts to finance such trading."
Company Directors Disqualification Act 1986
1 Citers


 
Adam v Newbigging (1888) 13 App Cas 308
1988
HL
Lord Watson
Company
There was a sale of a share in a partnership, which had become insolvent since the contract. Held: The House ordered rescission and mutual restitution, though the misrepresentation was not fraudulent, and it gave ancillary directions so as to work out the equities. A former partner remains liable for the partnership debts incurred while he was, "de facto" a member of the partnership. Lord Watson: "I entertain no doubt that these misrepresentations, although not fraudulently made, are sufficient to entitle the respondent to rescind the arrangement of February 1883, if he is in a position to give as well as to demand restitution."
1 Cites

1 Citers


 
Ex parte Glossop; Re a Company (No 00370 or 1987) [1988] 1 WLR 1068
1988
ChD
Harman J
Company
The court heard a complaint as to the non payment of dividends. Harman J said: "It is, in my judgment, vital to remember that actions of boards of directors cannot simply be justified by invoking the incantation 'a decision taken bona fide in the interests of the company'. The decision of the Privy Council in Howard Smith Ltd. v. Ampol Petroleum Ltd. [1974] A.C. 821 clearly establishes that a decision can be attacked in the courts and upset notwithstanding (a) that directors were not influenced by any 'corrupt' motive, by which I mean any motive of personal gain as by obtaining increased remuneration or retaining office, and (b) that directors honestly believed that their decision was in the best interests of the company as they saw its interests. Lord Wilberforce's observations delivering the advice of the board at p. 831E acquits the directors of corrupt motive; at p. 832 he asserts the primacy of the board's judgment; but he goes on, at p. 835, to assert that there remains a test, applicable to all exercises of power given for fiduciary purposes, that the power was not to be exercised for any 'bye-motives'.
If it were to be proved that directors resolved to exercise their powers to recommend dividends to a general meeting, and thereby prevent the company in general meeting declaring any dividend greater than recommended, with intent to keep moneys in the company so as to build a larger company in the future and without regard to the right of members to have profits distributed so far as was commercially possible, I am of opinion that the directors' decision would be open to challenge. This is an application, in a sense, of the principle affirmed in so many local government cases and usually called "the Wednesbury principle": Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 K.B. 223. If it were proved that the board of directors had habitually so exercised its powers that could justify the making of an order for winding up on the just and equitable ground."
1 Cites

1 Citers


 
Wilson v Dunbar Bank plc 1988 SLT 93
1988
OHCS
Lord Mayfield
Company
An agreement to the insertion of book values in a balance sheet prepared during the continuance of the partnership did not bind the deceased partner if that balance sheet fell to be used for the purpose of the ascertainment his share in the partnership at his death.
1 Citers


 
Re Ratners Group [1988] BCLC 685
1988
ChD
Harman J
Company
The court set out the considerations for protecting preference shareholders on the compulsory repurchase of their shares. In this case reductions of share premium account was considered in order to facilitate the writing-off of goodwill: "the Court will not do anything in vain"
1 Citers


 
In re TR Technology Investment Trust Plc [1988] BCLC 256
1988
ChD
Hoffmann J
Company, Equity
The court was asked whether the limition on the circumstances in which the court could remove restrictions imposed under section 794, applied to a merely interim order. Held: It did not. Hoffmann J said of the powers t demand information given under the 1985 Act: "the company, through its existing board, is given the unqualified right to insist that contests for the hearts and minds of shareholders are conducted with cards on the table." and "A company is therefore able, by notices under s212, to track down all persons who, within a very extended definition, have interests in its shares. The reason why the definition is so extensive is to counter the limitless ingenuity of persons who prefer to conceal their interests behind trusts and corporate entities."
Companies Act 1985 212
1 Cites

1 Citers


 
Caparo Industries plc v Dickman [1988] BCLC 387; Times, 5 August 1988
5 Aug 1988
QBD
Sir Neil Lawson
Company, Professional Negligence
The plaintiff complained that they had suffered losses after purchasing shares in a company, relying upon statements made in the accounts by the auditors (third defendants). Held: The claim failed. Whilst auditors might owe statutory duties to shareholders as a class, there was no common law duty to individual shareholders such as would enable an individual shareholder to recover damages for loss sustained by him in acting in reliance upon the audited accounts.
1 Citers


 
Attorney-General's Reference (No 1 of 1988) Times, 19 October 1988
19 Oct 1988
CACD

Crime, Company
The defendant received price-sensitive information. The Attorney-General appealed his acquittal, the judge having directed the jury that in order to have 'obtained' information within the subsection, he must have carried out some act, that he had expended some effort or acquired the information on purpose. Held: The meaning was wider than as stated by the judge, and included any individual who had obtained information from another. No more was required than to receive the information.
Company Securities (Insider Dealing) Act 1985 1(3)
1 Cites

1 Citers



 
 In re A Company (No 006834 of 1988); 1989 - (1989) 5 BCC 218
 
In re Ricardo Group Plc [1989] BCLC 566
1989
ChD
Millett J
Company
The company had obtained a restrictions order under Part XV. An application was made to the court for relief. Held: On the facts relief was refused. The respondent had secured discharge of the order under the liberty to apply, having provided the requested information, notwithstanding the company's wish to hold on to the order pending further enquiries as to the completeness and accuracy of the information provided.
Millett J said: "it would be idle if I were to delude myself into thinking that these applications are made in the course of ordinary litigation. In the first place, an order imposing Part XV restrictions on shares has a much wider effect than an ordinary interlocutory injunction.
. . Far from preserving the status quo, they interfere with it. They are granted as a sanction to compel the provision of information to which the company is entitled. It follows, in my judgment, that once the information is supplied, any further justification for the continuance of the sanction disappears." and "in my judgment, these restriction orders are not to be used as weapons to gain a temporary advantage over an opponent in a contested takeover bid. Their only legitimate purpose is to coerce a recalcitrant respondent into providing the requisite information."
Companies Act 1985 Part XV
1 Citers


 
Caparo Industries plc v Dickman [1989] QB 653
1989
CA
Bingham LJ, O'Connor LJ
Professional Negligence, Company
The plaintiffs had purchased shares in a company, relying upon accounts prepared by the second defendant auditors. They appealed against a decision that the auditors did not owe them a duty in negligence, not being shareholders. Held: The appeal succeeded (O'Connor LJ dissenting). Whilst there was no relationship between an auditor and a potential investor sufficiently proximate to give rise to a duty of care at common law, there was such a relationship with individual shareholders, so that an individual shareholder who suffered loss by acting in reliance on negligently prepared accounts, whether by selling or retaining his shares or by purchasing additional shares, was entitled to recover in tort.
Bingham LJ said that in considering whether or not a duty of care of particular scope was incumbent upon a defendant it was material to take into consideration whether it was just and reasonable that it should be so.
1 Cites

1 Citers


 
Re A company, ex parte Kremer [1989] BCLC 365
1989

Hoffmann J
Company
Hoffmann J said: "Counsel for the petitioner said the petition made allegations of mismanagement and misappropriation of funds by improper payments against the respondent and that, if these were established at the trial, the court might think it right to order the respondent to sell his shares. Taken at their face value, these allegations amount at most to high-handed conduct in certain matters. There is nothing in them which can carry a serious imputation of dishonesty. This is an ordinary case of breakdown in confidence between the parties. In such circumstances, fairness requires that the minority shareholder should not have to maintain his investment in a company managed by the majority with whom he has fallen out. But the unfairness disappears if the minority shareholder is offered a fair price for his shares. In such a case, s 459 was not intended to enable the court to preside over a protracted and expensive contest of virtue between the shareholders and to award the company to the winner."
Companies Act 1985 459
1 Citers



 
 Attorney-General's Reference (No 1 of 1988); HL 1989 - [1989] 2 WLR 729

 
 Regina v Philippou; CA 1989 - (1989) 89 Cr App R 290; Times, 06 April 1989
 
In re Calmex Ltd [1989] 1 All ER 485; [1989] BCLC 299
1989

Hoffmann J
Company
The court could exercise a supervisory jurisdiction over the registrar of companies, and enforce his duties through judicial review. The jurisdiction was not general, but one exercising normal public law jurisdiction. In particular, the court has power to order the Registrar of Companies to remove from the register a winding-up order which ought not to have been made and was later rescinded.
1 Citers


 
Re Walter L Jacob Ltd [1989] 5 BCC 244; [1989] BCLC 345
1989
CA
Nicholls LJ
Company
Having authorised an enquiry under section 447, the Secretary of State presented a winding-up petition of the respondent, an authorised dealer in securities. The company had been obliged to cease trade by its regulatory body. The judge held that the public interest did not require the company to be wound up as it had ceased to trade anyway. Held: The judge had erred. There was a balancing exercise. If the company had still been dealing in securities, it would be just and equitable that it should be wound up. Did the fact that the company ceased to carry on that business immediately before the petition was presented make a crucial difference? It did not.
Nicholls LJ said: "In considering whether or not to make a winding-up order under sec. 122(1)(g), the court has regard to all the circumstances of the case as established by the material before the court at the hearing. Normally that will involve the court, faced with a petition presented by a creditor or a contributory, considering primarily the conflicting interests and wishes of the opposing parties to the petition, whether creditors or contributories or the company itself. The court will consider those matters which constitute reasons why the company should be wound up compulsorily, and those which constitute reasons why it should not. The court will carry out a balancing exercise, giving such weight to the various factors as is appropriate in the particular case. In principle the exercise to be carried out where the petitioner is the Secretary of State is the same. The only difference lies in the nature of the reasons being put forward by the petitioner for the making of a compulsory winding-up order."
Nichols LJ discussed the position in public interest winding up petitions: "The court's task, in the case of so called "public interest" petitions, as in the case of all other petitions invoking the courts winding up jurisdiction under section 122(1)(g), is to carry out the balancing exercise described above, having regard to all the circumstances as disclosed by the totality of the evidence before the court. In respect of all such petitions, whoever may be the petitioner, the court has to weigh the factors which point to the conclusion that it would be just and equitable to wind up the company against those which point to the opposite conclusion. It is to the court that Parliament has entrusted this task in all cases. Thus where the reasons put forward by the petitioner are founded on considerations of public interest, the court, if it is to discharge its obligation to carry out the balancing exercise, must itself evaluate those reasons to the extent necessary for it to form a view on whether they do afford sufficient reason for making a winding up order in the particular case.
In the case of "public interest" petitions, the court will, of course, carry out that evaluation with the assistance of evidence and submissions from the Secretary of State and from other parties. When doing so the court will take note that the source of the submissions that the company should be wound up is a government department charged by Parliament with wide ranging responsibilities in relation to the affairs of companies. The department has considerable expertise in these matters and can be expected to act with the proper sense of responsibility when seeking a winding up order. But the cogency of the submissions made on behalf of the Secretary of State will fall to be considered and tested in the same way as any other submissions. His submissions are not ipso facto endowed with such weight that those resisting a winding up petition presented by him will find the scales loaded against them."
Coompanies Act 1985 122(1)(g) 447
1 Citers


 
Re International Tin Council [1989] Ch 309; [1988] 3 WLR 1159
1989
CA
Nourse LJ
Company
Creditors sought to treat the International Tin Council as an "association" for the purposes of a provision under the Companies Act 1985 allowing for unregistered companies to be wound up. Held: The decision in Re a Company was binding. The presentation of a petition based upon an arbitration award was not enforcement of the award. The Court identified a range of reasons for excluding it from the scope of entities to which the relevant provision would apply.
Companies Act 1985
1 Cites

1 Citers


 
Re Thorn EMI [1989] BCLC 612
1989

Harman J
Company

1 Citers


 
Re Crossmore Electrical and Civil Engineering Ltd (1989) 5 BCC 37
1989


Company
Disputes between shareholders should not be settled with assistance form the funds of the company.
1 Citers



 
 JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry; HL 1989 - [1990] 2 AC 418; [1989] 3 WLR 969; [1989] Ch 72; [1989] 3 All ER 523
 
Maclaine Watson and Co Ltd v International Tin Council [1989] 3 All ER 523
2 Jan 1989
HL
Templeman and Oliver LL
International, Company
The International Tin Council was a body constituted by an international treaty not incorporated into law in the United Kingdom. The ITC was also created a legal person in the United Kingdom by article 5 1972 Order. Held: As a legal person in the United Kingdom - rather than the states who were its members and the parties to the international treaty - the ITC was the contracting party in the contracts it had entered into with the appellant companies. There was no basis for holding the member states liable for its debts, and, even if in international law any such basis had existed, there would have been no basis for enforcing such a liability in a United Kingdom court. If under international law the (unincorporated) treaty made the ITC the agent of its members when contracting, this too was a liability which a United Kingdom court could not enforce, if it could not be found in the 1972 Order. A claim for the appointment of a receiver over ITC's assets, including any claims it might have under the treaty to be indemnified by its members in respect of its liabilities to the appellants, failed for similar reasons. An unincorporated treaty can create no rights or obligations in domestic law.
Lord Templeman stressed the inability of United Kingdom courts to enforce unincorporated "treaty rights and obligations conferred or imposed by agreement or by international law" though it suggests such courts might look at an unincorporated treaty "for the purpose of resolving any ambiguity in the meaning and effect of the Order of 1972".
Lord Oliver: "It is axiomatic that municipal courts have not and cannot have the competence to adjudicate upon or to enforce the rights arising out of transactions entered into by independent sovereign states between themselves on the plane of international law. . . . That is the first of the underlying principles. The second is that, "as a matter of the constitutional law of the United Kingdom, the Royal Prerogative, whilst it embraces the making of treaties, does not extend to altering the law or conferring rights upon individuals or depriving individuals of rights which they enjoy in domestic law without the intervention of Parliament. Treaties, as it is sometimes expressed, are not self-executing. Quite simply, a treaty is not part of English law unless and until it has been incorporated into the law by legislation. So far as individuals are concerned, it is res inter alios acta from which they cannot derive rights and by which they cannot be deprived of rights or subjected to obligations; and it is outside the purview of the court not only because it is made in the conduct of foreign relations, which are a prerogative of the Crown, but also because, as a source of rights and obligations, it is irrelevant."
However he recognised exceptions: "These propositions do not, however, involve as a corollary that the court must never look at or construe a treaty. " and "it is well established that where a statute is enacted in order to give effect to the United Kingdom's obligations under a treaty, the terms of the treaty may have to be considered and, if necessary, construed in order to resolve any ambiguity or obscurity as to the meaning or scope of the statue. Clearly, also, where parties have entered into a domestic contract in which they have chosen to incorporate the terms of the treaty, the court may be called upon to interpret the treaty for the purposes of ascertaining the rights and obligations of the parties under their contract" and "Further cases in which the court may not only be empowered but required to adjudicate upon the meaning or scope of the terms of an international treaty arise where domestic legislation, although not incorporating the treaty, nevertheless requires, either expressly or by necessary implication, resort to be had to its terms for the purpose of construing the legislation . . . or the very rare case in which the exercise of the Royal Prerogative directly effects an extension or contraction of the jurisdiction without the constitutional need for internal legislation . . . " and "It must be borne in mind, furthermore, that the conclusion of an international treaty and its terms are as much matters of fact as any other fact. That a treaty may be referred to where it is necessary to do so as part of the factual background against which a particular issue arises may seem a statement of the obvious. But it is, I think, necessary to stress that the purpose for which such reference can legitimately be made is purely an evidential one. Which states have become parties to a treaty and when and what the terms of the treaty are are questions of fact. The legal results which flow from it in international law, whether between the parties inter se or between the parties or any of them and outsiders, are not and they are not justiciable by municipal courts."
International Tin Council (Immunities and Privileges) Order 1972 - International Organisations Act 1968
1 Cites

1 Citers


 
Uphoff v International Energy Trading Times, 04 February 1989
4 Feb 1989


Company
Even if shareholders owed each other a duty of good faith as parties to a joint venture, it was not arguable that there was a universal duty of disclosure. Had one been found, it would not sound in damages.

 
Commission v Italy (Rec 1989,P 4035) (Sv89-269 Fi89-269) (Judgment) C-3/88; [1989] EUECJ C-3/88
5 Dec 1989
ECJ

European, Company
ECJ 1. The principle of equal treatment, of which Articles 52 and 59 of the Treaty embody specific instances, prohibits not only overt discrimination by reason of nationality but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result.
2. The exception to freedom of establishment and freedom to provide services provided for by the first paragraph of Article 55 and by Article 66 of the EEC Treaty must be restricted to those of the activities referred to in Articles 52 and 59 which in themselves involve a direct and specific connection with the exercise of official authority. That is not the case in respect of activities concerning the design, programming and operation of data-processing systems for the public authorities, since they are of a technical nature and thus unrelated to the exercise of official authority.
3. A Member State which provides that only companies in which all or a majority of the shares are either directly or indirectly in public or State ownership may conclude agreements for the development of data-processing systems for the public authorities thereby fails to fulfil its obligations under Articles 52 and 59 of the Treaty and Directive 77/62 coordinating procedures for the award of public supply contracts .
[ Bailii ]

 
 Bristol Airport Plc and Another v Powdrill and Others; CA 21-Dec-1989 - [1990] 2 WLR 1362; [1990] Ch 744; [1990] BCLC 585
 
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