Links: Home | swarblaw - law discussions

swarb.co.uk - law index


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: 1993 To: 1993

This page lists 39 cases, and was prepared on 02 April 2018.

 
Re A Company No 01126 of 1992 [1993] BCC 325
1993


Company
Company funds should not be used to support disputes between shareholders.
1 Citers


 
In re British and Commonwealth Holdings plc (Nos 1 and 2) [1993] AC 426
1993
HL

Company, Insolvency
Section 236 extended the power of a liquidator to require from the company's officers all the documents he would reasonably need in order to fulfil his duties under the Act.
Insolvency Act 1986 236
1 Citers


 
Re D' Jan of London Limited [1993] BCLC 646
1993

Hoffmann LJ
Company
The court described the roles of a director of a company: " . . the duty of care owed by a director at common law is accurately stated in sec. 214(4) of the Insolvency Act 1986. It is the conduct of: a reasonably diligent person having both- (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company, and (b) the general knowledge, skill and experience that that director has."
1 Citers


 
Secretary of State for Trade and Industry v Ettinger [1993] BCLC 896
1993

Nicholls V-C
Company
The court discussed the standards required of company directors. "Those who take advantage of limited liability must conduct their companies with due regard to the ordinary standards of commercial morality. They must also be punctilious in observing the safeguards laid down by Parliament for the benefit of others who have dealings with their companies. They must maintain proper books of account and prepare annual accounts; they must file their accounts and returns promptly; and they must fully and frankly disclose information about deficiencies in accordance with the statutory provisions." and "The seriousness with which such conduct is to be viewed is shown by the provisions of the Disqualification Act itself. The extent to which a director is responsible for any failure to comply with the statutory provisions regarding accounting records and the preparation of annual accounts is one of the matters to which the court is required to have regard in determining unfitness to be concerned in the management of a company. Those who persistently fail to discharge their statutory obligations in this respect can expect to be disqualified, for an appropriate period of time, from using limited liability as one of the tools of their trade."
Company Directors Disqualification Act 1985
1 Citers


 
In Re Portbase Clothing Ltd; Mould v Taylor [1993] Ch 388
1993

Chadwick J
Insolvency, Company
The company had given two debentures, one fixed and one floating. Their priority was fixed by a deed of priority. On insolvency the liquidator sought direction as to the application of the assets. Held: The deed made the bank's floating charge subject to the later floating charge. On crystallisation, the later charge took priority. Under the section, the preferential creditors had overall priority. The assets available to pay the liquidation expenses included the assets subject to the floating charge even though that had crystallised before they were incurred: "a holder of a subsequent fixed charge which has been made subject to a prior floating charge – either by express provisions in the fixed charge itself or by a restriction in the floating charge of which the holder of the fixed charge had notice – takes his security upon terms that, if before the charged property has been realised under that fixed charge events occur which cause the floating charge to crystallise, then the proceeds of realisation must be paid to the holder of the floating charge; the holder of the fixed charge can have no claim upon those proceeds until the claims under the floating charge have been paid out."
Insolvency Act 1984 175(2)
1 Cites

1 Citers


 
Regina v Secretary of State Employment, ex parte Equal Opportunities Commission and Another [1993] 1 WLR 872; [1993] ICR 251
1993
CA

Company, Discrimination

1 Citers


 
In re Maxwell Communications plc [1993] 1 WLR 1402
1993
ChD
Vinelott J
Company, Insolvency
It was argued that the pari passu distribution of assets among unsecured creditors was a general rule of insolvency law from which it was not possible to contract out, even to one's own disadvantage, particularly by analogy with cases on set-off in insolvency. Held: This was not the law. There was no reason why a particular creditor should not waive his right to prove altogether, or save to the extent of assets remaining after another creditor is satisfied, and that he could do this either in the insolvency or in advance of it.
Vinelott J explained his decision in In re British & Commonwealth plc (No 3): "I took the view that to the extent that the assets of the company were insufficient to meet the liabilities to unsecured creditors, other than the holders of the loan stock, the holders of the loan stock had no interest in the assets of the company and no right to vote at a meeting of unsecured creditors, that in the very unlikely, indeed, merely theoretical possibility that the realisation of the company's assets would suffice to meet the claims of the scheme creditors, the rights of the holders of the unsecured loan stock would be unaffected by the scheme; and that in these circumstances the liquidator [sic - he must have meant administrator] could properly call a meeting of the scheme creditors alone, and if the scheme of arrangement was approved, apply to the court to sanction the scheme."
1 Cites

1 Citers


 
Advanced Technology Structures Ltd v Cray Valley Products Ltd [1993] BCLC 723
1993
CA
Hirst LJ, Leggatt LJ, Glidewell LJ
Legal Aid, Company
An assignment of the cause of action should not be recognised or given effect because it was a "sham".
Hirst LJ said that the assignment was: "a mere stratagem or device to enable the company to carry on the proceedings, with the support of Mr. Pratt's [the assignee] legal aid, which manifestly neither they nor he could afford to do otherwise. . . The sole purpose of the assignment was therefore to tap the resources of the legal aid fund, which are available to Mr. Pratt only because of his own impecuniosity." To give effect to the assignment would conflict with "the underlying policy of the Act," which was that "legal aid should not be available to corporate plaintiffs."
Leggatt LJ said: "When Parliament decided that legal aid should not be available to corporations, it cannot have been its intention that a corporation should be able to nominate an employee, to whom it has assigned a right of action, to conduct the litigation on its behalf with the assistance of legal aid for which he was eligible."
1 Citers


 
Green v Green [1993] 1 FLR 326
1993
FD
Connell J
Family, Company
In an ancillary relief application, Connell J awarded to the wife assets vested in a limited company whose entire share capital was owned by the husband.
Matrimonial Causes Act 1973 37
1 Citers


 
Re Ghyll Beck Driving Range Ltd [1993] BCLC 1126
1993

Vinelott J
Company

1 Citers


 
Re Ledingham-Smith [1993] BCLC 635
1993
ChD
Morritt J
Company, Insolvency
The bankrupt's accountants had been paid their fees by standing order. Arrears mounted and the sum was increased. On the bankruptcy, the trustee sought to recover the increased payment. The court considered whether they had been given a preference. Held: The accountants had continued to act, and therefore were not in a better position than they would have been had they stopped work and not been paid. To be a preference, there had to be shown evidence of a 'preference in fact'. Morritt J said that: "it may be that pressure does not displace desire in the way that it formerly displaced a dominant intention to prefer but it can certainly affect the question of desire."
and "The phrase 'will be better' in relation to the event of the individual's bankruptcy used in Section 340(3)(b) envisages a bankruptcy after the doing of the thing in question. It also predicates that the position will be better, not may be."
Insolvency Act 1986 249 435
1 Citers


 
re Swift 736 Limited [1993] BCLC 796
1993


Company
The purpose of the jurisdiction created under the Act is to promote better management standards in companies.
Company Directors Disqualification Act 1986
1 Citers


 
El Ajou v Dollar Land Holdings Plc and Another Times, 03 January 1993; [1993] 3 All ER 717
3 Jan 1993
ChD
Millett J
Company, Equity
A non active director may still be company's 'directing mind'. The doctrine of attributing the actions of individuals to a company is that "Their minds are its mind; their intention its intention; their knowledge its knowledge."
Tracing was no longer available at common law because funds received had become mixed with others, but the remedy remained available in equity.
1 Citers


 
In Re Pamstock Ltd Times, 05 January 1993
5 Jan 1993
ChD

Company
A failure to file his company's accounts is a serious default, and is sufficient to warrant the disqualification of a company secretary from acting as a company director. The filing of accounts is a substantial protection for those trading with limited companies.
Company Directors Disqualification Act 1986 - Companies Act 1985


 
 Bishopsgate Investment Management Ltd (in Liquidation) v Maxwell; CA 16-Feb-1993 - Times, 16 February 1993; [1993] BCC 120
 
In Re Land and Property Trust Co Plc (No 2) Times, 16 February 1993
16 Feb 1993
CA

Litigation Practice, Insolvency, Company
The judge was wrong to refuse an adjournment when he had insufficient evidence before him properly to make his decision, and when a costs order was sought against the company directors personally in respect of an application for the winding up of a company. The directors had not been party to the early part of the proceedings and when told of the application for costs requested the opportunity to adjourn so that they could prepare a case.

 
In Re Seagull Manufacturing Co Ltd (In Liquidation); Tucker Ind Summary, 22 February 1993; [1993] Ch 345
22 Feb 1993
CA
Dillon LJ, Peter Gibson J
Company, Insolvency
The court has jurisdiction to order the public examination of a company director in in a compulsory liquidation about the affairs of the company, even though he might not be within the jurisdiction. The court found no reasons of comity which would prevent those who voluntarily were officers or otherwise participated in the formation or running of an English company to be capable of being summoned by the English court for public examination. Further, Parliament had provided for the winding up of foreign companies, where there was a sufficient connection with the jurisdiction, knowing that section 133 should apply in such a case, thus indicating an intention that officers who may well not be within the jurisdiction should be examined publicly.
Peter Gibson J said: "Where a company has come to a calamitous end and has been wound up by the court, the obvious intention of this section was that those responsible for the company's state of affairs should be liable to be subjected to a process of investigation and that investigation should be in public. Parliament could not have intended that a person who had that responsibility could escape liability to investigation simply by not being within the jurisdiction. Indeed, if the section were to be construed as leaving out of its grasp anyone not within the jurisdiction, deliberate evasion by removing oneself out of the jurisdiction would suffice. That seems to me to be a wholly improbable intention to attribute to Parliament. Further, section 133 must be construed in the light of circumstances existing in the mid-1980s when the legislation was enacted. By use of the telephone, telex and fax machines English companies can be managed perfectly well by persons who need not set foot within the jurisdiction. There is no requirement that an officer of an English company must live in England, nor of course need an officer of an overseas company which may be wound up by the court. Such a company is very likely to have officers not within the jurisdiction."
Insolvency Act 1986 133
1 Cites

1 Citers


 
Advanced Technology Structures Ltd v Cray Technology Ltd Ind Summary, 22 February 1993
22 Feb 1993
CA

Legal Aid, Company
There should be no legal aid for a company's nominee to bring what were, in effect, company proceedings. Parliament had deliberately excluded such assistance, and it should not be circumvented by the company assigning its rights in action to a nominee.
Legal Aid Act 1974


 
 Macmillan Inc v Bishopsgate Investment Trust Plc; Chd 17-Mar-1993 - Gazette, 17 March 1993
 
Re Land and Property Trust Co Plc (No 2) Gazette, 17 March 1993
17 Mar 1993
CA

Company
Need for evidence of bad faith before costs award against directors.


 
 (Unnamed) Service On Overseas Company; CA 24-Mar-1993 - Gazette, 24 March 1993
 
Re: New Bullas Trading Ltd Ind Summary, 05 April 1993; [1993] BCC 251
5 Apr 1993
ChD
Knox J
Company, Insolvency
A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge.
Insolvency Act 1986 40
1 Cites

1 Citers


 
High St Services and Others v BCCI Sa Independent, 06 April 1993
6 Apr 1993
CA

Company
A company director may set off his own deposits against guarantees he has given for an insolvent company.

 
Re Arrows Ltd (No 4) Independent, 08 April 1993; Gazette, 09 June 1993
8 Apr 1993
CA

Criminal Practice, Company
A Civil Court cannot stop the Serious Fraud Office using evidence which had been gathered under compulsion during Insolvency interviews under s236. Any element of confidentiality was overriden.
Criminal Justice Act 1987 2(8) 3 - Insolvency Act 1986 236
1 Cites

1 Citers


 
International Credit and Investment Company (Overseas) Ltd and Others v Adham Ind Summary, 26 April 1993
26 Apr 1993
Chd

Company, Jurisdiction
England is the correct forum to discuss a company registered in England.

 
Re Seagull Manufacturing Co Ltd Ind Summary, 03 May 1993
3 May 1993
ChD

Company, Jurisdiction
A company director who was resident overseas may be subject to disqualification proceedings.
Company Directors Disqualification Act 1986 6
1 Cites

1 Citers


 
In Re Devon and Somerset Farmers Ltd Times, 25 May 1993; Gazette, 01 September 1993; [1993] BCC 410
25 May 1993
ChD
Hague QC J
Insolvency, Company
An Industrial & Provident Societies Act society is unregistered and is therefore not a company for the purposes of s40. Had that been intended express statutory provision would have been made.
Insolvency Act 1986 40 251 - Industrial and Provident Societies Act 1965 - Companies Act 1985 735
1 Cites


 
Nisbet v Shepherd Ind Summary, 19 July 1993; Times, 01 July 1993
1 Jul 1993
CA

Company
The omission of the amount of consideration does not invalidate a share transfer document.
Companies Act 1985 183

 
In Re Supply of Ready Mixed Concrete (No 2) Times, 08 July 1993; Independent, 14 July 1993
8 Jul 1993
CA

Company, Contempt of Court, Commercial
An employer was not liable for its employee's action in contempt of court against the company's clear instructions with regard to anti-competitive agreements.
1 Cites

1 Citers


 
National Westminster Bank Plc and Another and Barclays Bank Plc and Another v Inland Revenue Commissioners Ind Summary, 30 August 1993; Times, 06 August 1993
6 Aug 1993
ChD

Income Tax, Company
A business expansion tax plan was valid if it was issued before the Income and Corporation Taxes Act. Shares were issued on the sending of the allotment letter, not when the shares came to be registered in the company's books.
Income and Corporation Taxes Act 1988 289 299A
1 Cites

1 Citers



 
 In Re Bank of Credit and Commerce International Sa, In Re BCCI (Overseas) Ltd (No 9); ChD 11-Aug-1993 - Ind Summary, 20 September 1993; Times, 11 August 1993; [1994] 2 BCLC 636
 
Re D'Jan of London Ltd; Copp v D'Jan Gazette, 01 September 1993; [1994] 1 BCLC
1 Sep 1993
ChD
Hoffmann LJ
Company
Directors liability to compensate on insolvency for own negligence. "In my view, the duty of care owed by a director at common law is accurately stated in s 214(4) of the Insolvency Act 1986. It is the conduct of – 'a reasonably diligent person having both – (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company, and (b) the general knowledge, skill and experience that that director has.'"
1 Citers


 
Re Vedmay Ltd Times, 21 October 1993; Ind Summary, 18 October 1993; Ind Summary, 06 September 1993
6 Sep 1993
ChD

Landlord and Tenant, Company, Insolvency, Landlord and Tenant
A statutory tenant has a sufficient locus standi to request the vesting in him of a house disclaimed by the owner company's liquidator.
Insolvency Act 1986 181

 
Arab Bank Plc v Mercantile Holdings Ltd and Another Gazette, 23 March 1994; Times, 19 October 1993; Ind Summary, 11 October 1993
11 Oct 1993
Chd

Company
A foreign subsidiary can give financial assistance for purchase of a company's shares. Assistance to buy shares in the parent company by a subsidiary is not ipso facto assistance from parent company.
Companies Act 1985 151


 
 In Re Carecraft Construction Co Ltd; ChD 13-Oct-1993 - Gazette, 13 October 1993; [1994] 1 WLR 172; [1993] 4 All ER 499
 
In Re A Company (No 007946 of 1993) Times, 18 November 1993; Gazette, 02 March 1994; [1994] 2 WLR 439
18 Nov 1993
ChD
Morritt J
Insolvency, Company, Northern Ireland
A Northern Ireland company can be wound up in England and Wales if its principal place of business had been in England and Wales. The company incorporated in Northern Ireland became insolvent. It sought to strike out the Secretary of State's petition under 124A, and said it could not apply to a Northern Ireland Company. Held: The definition of an incorporated company included a company incorporated anywhre in the UK.
Insolvency Act 1986 124A 220


 
 Regina v Brockley; CACD 25-Nov-1993 - Gazette, 26 January 1994; Times, 25 November 1993; [1994] 99 Cr App R 385
 
El Ajou v Dollar Land Holdings Ltd Times, 03 January 1994; [1994] 2 All ER 685; [1993] EWCA Civ 4; [1994] BCC 143; [1994] 1 BCLC 464
2 Dec 1993
CA
Nourse, Rose, Hoffmann LJJ
Company, Equity, Torts - Other, Trusts
The court was asked whether, for the purposes of establishing a company's liability under the knowing receipt head of constructive trust, the knowledge of one of its directors can be treated as having been the knowledge of the company. Held: The company was fixed with the knowledge of its part-time chairman and a non-executive director, because he had acted as its directing mind and will for the particular purpose of arranging its receipt of the tainted funds. It was sufficient that the director had management and control so far as the receipt of the fraud was concerned, having made arrangements for the receipt and disposal of the money, even though he had no general managerial responsibility in the company.
Hoffmann LJ set out the ingredients of knowing receipt: "For this purpose the plaintiff must show, first a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets are traceable to a breach of fiduciary duty."
When asking who was the controlling mind of a company, the relevant test is to find the person who had management and control in relation to the act or omission in point. The formal position or status as a director is relevant but not decisive. A "pragmatic" approach is necessary: "Decided cases show that, in regard to the requisite status and authority, the formal position, as regulated by the company's articles of association, service contracts and so forth, though highly relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view he was right to do so, although it has led me, with diffidence, to a conclusion different from his own" and " . . different persons may for different purposes satisfy the requirements of being the company's directing mind and will. " The court considered the ingredients of the tort of 'knowing receipt': "For this purpose the plaintiff must show, first, a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets he received are traceable to a breach of fiduciary duty." (Hoffmann LJ)
Nourse LJ said: "The doctrine attributes to the company the mind and will of the natural person or persons who manage and control its actions. At that point, in the words of Millett J ([1993] 3 ALL ER 717 at 740): "Their minds are its mind; their intention its intention; their knowledge its knowledge." It is important to emphasise that management and control is not something to be considered generally or in the round. It is necessary to identify the natural person or persons having management and control in relation to the act or omission in point. This was well put by Eveleigh J in . . R v Andrews Weatherfoil Ltd . .
Decided cases show that, in regard to the requisite status and authority, the formal position, as regulated by the company's articles of association, service contracts and so forth, though highly relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view he was right to do so, although it has led me, with diffidence, to a conclusion different from his own."
1 Cites

1 Citers

[ Bailii ]

 
 In Re Selectmove Ltd; CA 21-Dec-1993 - Times, 13 January 1994; Ind Summary, 17 January 1994; [1995] 1 WLR 474; [1993] EWCA Civ 8; [1995] STC 406; [1995] 2 All ER 531
 
Copyright 2014 David Swarbrick, 10 Halifax Road, Brighouse, West Yorkshire HD6 2AG.