The consideration for the grant of a lease was not a capital sum, but substantial building works. Application was made for its forfeiture. Held: Dillon LJ assumed that the words ‘if the tenant shall enter into liquidation whether compulsorily or voluntarily’ in a re-entry clause in a lease refer to the making of the winding … Continue reading Official Custodian for Charities v Parway Estates Developments (In Liquidation): CA 1985
References: [1985] AC 104 Coram: Lord Brandon, Lord Bridge The house decided against altering the rule in Page -v- Newman. ‘The common law does not award general damages for delay in payment of a debt beyond the date when it is contractually due’ The power given to the court under s 35A is discretionary. It … Continue reading President of India v La Pintada Compagnia Navigacia SA (‘La Pintada’): HL 1985
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Citations: [2005] All ER (D) 294, [2005] EWHC 1152, [2005] BCC 99, Times 31-May-2005 Statutes: Civil Procedure Rules 19.9, Companies Act 1985 151 Jurisdiction: England and Wales Litigation Practice Updated: 01 December 2022; Ref: scu.237278
The Court of Appeal is not strictly bound by the terms of leave to appeal given, but where the points had been specifically considered a point could only be heard with the leave of the Court of Appeal which had full power to regulate its own proceedings. Judges: Robert Walker LJ Citations: Times 14-Jan-1999, [1998] … Continue reading Yorkshire Bank Plc v Hall and Others: CA 18 Dec 1998
Transfer of shares can be supported by payment of salary in return by company. Citations: Times 08-Feb-1996 Statutes: Companies Act 1985 151 Jurisdiction: England and Wales Company Updated: 27 October 2022; Ref: scu.84586
Mrs Cox sought to declarations as to the effect of arrangements made on her divorce in an attempt to avoid contentious proceedings. The couple held equal shares in the family business, but the company registers were missing or had never existed. The husband claimed that the arrangements were provisional pending valuations of the assets. The … Continue reading Cox v Cox and Skan Dansk Design Limited: ChD 27 Apr 2006
Judges: Sir Andrew Morritt The Vice Chancellor Citations: [2002] EWHC 2331 (Ch), [2003] 1 BCLC 226 Links: Bailii Statutes: Companies Act 1985 151 Jurisdiction: England and Wales Cited by: Cited – Cox v Cox and Skan Dansk Design Limited ChD 27-Apr-2006 Mrs Cox sought to declarations as to the effect of arrangements made on her … Continue reading Bowthorpe Holdings Limited, Yasaiwa Securities Limited v Hills and others: ChD 8 Nov 2002
Judges: Rimer J Citations: [2007] EWHC 436 (Ch), [2009] BCC 295 Links: Bailii Statutes: Companies Act 1985 151 Jurisdiction: England and Wales Company Updated: 04 September 2022; Ref: scu.250016
A claim was made under provision disallowing the use of company assets for the purchase of the company’s own shares. Judges: Hodge QC HHJ Citations: [2010] EWHC 7 (Ch) Links: Bailii Statutes: Companies Act 1985 151 Jurisdiction: England and Wales Company Updated: 26 August 2022; Ref: scu.392551
Challenge to validity of mortgages executed by company – allegation that funds used for financial assistance in purchase of own shares – effect on loan.Toulson LJ approved the case of Waugh v Morris, saying: ‘130 years later, this statement of the law has added importance because of the explosion in the number of statutory regulations … Continue reading Anglo Petroleum Ltd and Another v TFB (Mortgages) Ltd: CA 16 May 2007
Mrs D had gone into business with the respondents to operate a residential care home. It was to be run from premises owned by the respondents. The respondents inter alia had failed to disclose previous convictions, the registration was cancelled, and the company was insolvent. Heads of agreement with an attached draft lease had been … Continue reading Dyment v Boyden and others: CA 26 Nov 2004
The ‘general mischief’ of Section 151 was to stop the resources of the target company and its subsidiaries being used directly or indirectly to assist the purchase financially to make the acquisition. The reason for this is that it might prejudice the interests of the creditors of the target group and the interest of any … Continue reading Chaston v SWP Group Plc: CA 20 Dec 2002
An employment agreement contravening section 151 of the 1985 Act is unenforceable. The obvious mischief to which section 151 is directed is the case of a bidder financing his bid from the funds of the company acquired. The larger purpose had to be something other than the acquisition of shares, however beneficial the acquisition was … Continue reading Brady v Brady: HL 1988
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. Citations: Gazette 23-Mar-1994, Times 19-Oct-1993, Ind Summary 11-Oct-1993 Statutes: Companies Act 1985 151 Jurisdiction: England and Wales Company Updated: 08 April 2022; Ref: … Continue reading Arab Bank Plc v Mercantile Holdings Ltd and Another: Chd 11 Oct 1993
The company was insolvent, depending upon loans to it from its parent company. In the liquidation, it was claimed that in a scheme for the acquisition of the shares, the assumption of liability to repay a loan amounted to unlawful financial assistance in the acquisition of its shares. The claimant company appealed a striking out … Continue reading MT Realisations Limited (In Liquidation) v Digital Equipment Co Limited: CA 10 Apr 2003
References: Gazette 23-Mar-1994, Times 19-Oct-1993, Ind Summary 11-Oct-1993 Ratio: 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. Statutes: Companies Act 1985 151 Last Update: 22-Aug-16 Ref: 77845
Auditors who were in a position to advise a company’s directors as to the legality of them making loan payments to a shell company which was acquiring there shares had a duty so to advise. The directors of a company sued them for failing to warn them that a loan made by the company might … Continue reading Coulthard, Ashton Shuttleworth, and Dawes v Neville Russell (a Firm): CA 27 Nov 1997
A company in general meeting can release or compromise a claim for breach of section 151. Judges: Mr Justice Richards Citations: [2004] EWHC 1422 (Ch) Links: Bailii Statutes: Companies Act 1985 459 Jurisdiction: England and Wales Cited by: Cited – Cox v Cox and Skan Dansk Design Limited ChD 27-Apr-2006 Mrs Cox sought to declarations … Continue reading Baker v Anthony Potter and Bellevue Garages Limited: ChD 22 Jun 2004
The Court was asked in what circumstances is it permissible to sue an unnamed defendant? The respondent was injured when her car collided with another. The care was insured but by a driver giving a false name. The car owner refused to identify him. The insurers now appealed against Held: The appeal succeeded. It is … Continue reading Cameron v Liverpool Victoria Insurance Co Ltd: SC 20 Feb 2019
The company sought to say that loans of 15 million pounds were void under s151 of the 1985 Act. It was said that the loans infringed the provisions of s151 being unlawful financial assistance. Held: The loans were valid: ‘if it is lawful for a company to repay its own indebtedness and there is a … Continue reading Anglo Petroleum Ltd v TFB (Mortgages) Ltd: ChD 24 Feb 2006
The claimant company set out to sell land whilst it was still only in the process of incorporation. Its solicitors had signed as agents, and now sought an order for the purchaser to complete the contract. The respondent had not known of the non-incorporation of the company. The claimant later rescinded the contract, and forfeited … Continue reading Braymist Limited and Others v Wise Finance Company Limited: CA 20 Feb 2002
Mitting J set out the background to Royal Charters: ‘This is, I believe, the first time that the grant or refusal of a Royal Charter has been the subject of litigation. I propose, therefore, to begin by a brief analysis of the history and nature of Royal Charters and the process by which they are … Continue reading The Project Management Institute, Regina (on The Application of) v The Minister for The Cabinet Office and Others: Admn 17 Jul 2014
(South Africa) An offer was made of andpound;42,000 for the shares and the loan account that was then outstanding to the parent company less amounts owed to lenders on first mortgages. An analysis showed that andpound;40,258 was owed on the loan account and taking into account the higher securities the amount actually paid was less … Continue reading Gradwell (PTY) v Rostra Printers Ltd: 1959
The administrators challenged the validity of a charge which appeared to have been given by the company to secure the purchase of shares in the company. Held: The loan itself did not amount to assistance, but the charge did. It was indirect financial assistance. The company officers had not complied with the necessary whitewash procedures … Continue reading Harlow and Another v Loveday and Another; In re Hill and Tyler Ltd (in administration): ChD 28 May 2004
(New Zealand) The company a target of a takeover raised money (including by raising a loan on security of the company’s assets). Those were then used to declare lawful dividends which were then declared to the takeover shareholder. Held: The arrangement did not to infringe Section 62 Companies Act 1955. The giving of lawful dividends … Continue reading In re Wellington Publishing Company Ltd: 1973
Liability in Damages on Statute Breach to be Clear Damages were to be awarded against a Local Authority for breach of statutory duty in a care case only if the statute was clear that damages were capable of being awarded. in the ordinary case a breach of statutory duty does not, by itself, give rise … Continue reading X (Minors) v Bedfordshire County Council; M (A Minor) and Another v Newham London Borough Council; Etc: HL 29 Jun 1995
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 … Continue reading Charterhouse Investment Trust Ltd v Tempest Diesels Ltd: ChD 1986
Disputes arose between shareholders in a family company. Proceedings which expressly excluded the company were settled, but the company became insolvent. A later settlement was refused approval by the judge without the creditors consent. The claimant now sought a declaration that the earlier compromise bound the company. The company argued that the agreement was conditional … Continue reading Thakrar v Ciro Citterio Menswear Plc In Administration: ChD 1 Oct 2002
The parties agreed that damages were payable in an action for restitution, but the sum depended upon to a calculation of interest. They disputed whether such interest should be calculated on a simple or compound basis. The company sought compound . .
Fraudsters had successfully contrived to sell shares of others, by re-registering the shares to new addresses and requesting new certificates. The question was which of the company, the company registrars and the stockbrokers should bear the loss. . .
