Category: Company

Hill Street Services Company Ltd v National Westminster Bank Plc and Burjor Mistry: ChD 19 Oct 2007

The claimant company said that the bank had allowed money to be removed from its account without authority. Originally it said the second defendant, its former director had authrised the payments. On the second defendant denying this, the company withdrew its claim against him, and the bank started its own third party claim against him. The transactions had been undertaken on oral authorites given by telephone. Records showed that no telephone calls had been made on the relevant days, but an admitted call was not shown either.
Held: The evidence established that the second defendant knew more than he admitted. On the evidence the plaintiff’s claimagainst the bank failed.

Judges:

Peter Smith J

Citations:

[2007] EWHC 2379 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Rama Corporation Limited v Proved Tin and General Investment Limited QBD 1952
The court considered the doctrine of ostensible authority as regards the actions of a single director of a company, identifying three essential elements. . .
Cited – Morrell and Another v Workers Savings and Loan Bank (Jamaica) PC 18-Jan-2007
. .
Cited – HJ Symons v Barclays Bank Admn 2003
. .
Cited – Rhesa Shipping Co SA v Edmonds (The Popi M) HL 16-May-1985
The Popi M sank in calm seas and fair weather as a result of a large and sudden entry of water into her engine room through her shell plating. The vessel’s owners claimed against her hull and machinery underwriters, contending that the loss was . .
Lists of cited by and citing cases may be incomplete.

Banking, Company

Updated: 08 July 2022; Ref: scu.259921

Unadkat and Co (Accountants) Ltd v Bhardwaj and Another: ChD 11 Oct 2006

Section 651 was broad enough to enable the court to order that the costs of having the dissolution of a company declared void be treated as an expense in the winding-up, notwithstanding the decision of the House of Lords in Re Toshoku Finance UK plc [2002] 1 WLR 671 that Rule 4.218 contained an exhaustive statement of liquidation expenses.

Judges:

Norris QC J

Citations:

[2006] EWHC 2785 (Ch)

Links:

Bailii

Statutes:

Companies Act 1985 651

Jurisdiction:

England and Wales

Citing:

Approved – Re Gosscott (Groundworks) Ltd 1988
The court had jurisdiction under section 51 to order that the costs of administration proceedings overtaken by a compulsory liquidation could be ordered to be treated as costs in the winding-up. . .
Cited – Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc HL 20-Feb-2002
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was . .

Cited by:

Cited – Irish Reel Productions Ltd v Capitol Films Ltd ChD 10-Feb-2010
The petitioner’s winding-up petition had been dismissed on the defendant company being put into administration. The petitioner asked for its costs to be paid as an administration expense payable in priority to the administrator’s expenses.
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 08 July 2022; Ref: scu.246060

Freakley and others v Centre Reinsurance International Company and others: HL 11 Oct 2006

When it became clear that the company would be financially overwhelmed by asbestos related claims, a voluntary scheme of arrangement was proposed under s425. The House was now asked whether the right to re-imbursement of the company’s lawyers after the appointment of the administrators had a statutory priority over other costs of the administration, the floating charge and the unsecured creditors of the company.
Held: The appeal succeeded. Such claims did not have the priority sought. The House approved Chadwick LJ’s statement in the CA, but that did not mean that anyone with authority to act on behalf of the company must be deemed to have derived his authority from the administrator. The company may, before the appointment of the administrator, have conferred on someone an authority to contract on its behalf which, in law or in practice, the administrator cannot revoke. This is such a case. Such contracts are made on behalf of the company but not on behalf of the administrator, and liabilities for such debts should not have priority over those of other creditors.

Judges:

Lord Hoffmann, Lord Hope of Craighead, Lord Phillips of Worth Matravers, Lord Walker of Gestingthorpe, Lord Brown of Eaton-Under-Heywood

Citations:

[2006] UKHL [2006] UKHL 45, Times 16-Oct-2006

Links:

Bailii

Statutes:

Companies Act 1985 425

Jurisdiction:

England and Wales

Citing:

At First Instance – Centre Reinsurance International Co and Another v Curzon Insurance Ltd ChD 12-Feb-2004
It was a necessary part of the system of statutory transfers of insurance obligations under the Act, that the rights should be transferred before exhaustion of any policy excess, and notwithstanding the insolvency. The rights (inchoate at this . .
Appeal from – Freakley and Curzon Insurance Ltd v Centre Reinsurance International Company and Another; similar CA 11-Feb-2005
Claims were made for personal injury caused by asbestos. The re-insurers sought declaratory relief against the head insurers, and the administrators of the insolvent company. The administrators sought declarations in turn. Curzon insured the company . .
Cited – Groom v Crocker 1939
An action by a client against a solicitor alleging negligence in the conduct of the client’s affairs, is an action for breach of contract. A solicitor is not entitled to payment of his costs by his client where his own negligence makes the work he . .
Cited – Cox v Bankside Members Agency Ltd and Others CA 16-May-1995
Successful Lloyds names were entitled to enforce their claims in the normal time sequence. The transfer of the rights of the insured against the insurer under section 1(1) the 1930 Act takes place on the event of insolvency, even if the insured’s . .
Cited – Powdrill and Another v Watson and Another HL 23-Mar-1995
A receiver of a companies assets, who employed former staff of the company, beyond an initial period of 14 days, becomes personally responsible for their employment contracts, and consequently becomes liable for making redundancy payments. The 1870 . .
Cited – In re Atlantic Computer Systems Plc CA 1992
The chargor was a company which arranged with the chargee, a funding bank, that it should purchase equipment and let it on hire purchase to the chargor with permission to sub-lease to end users. The chargor charged to the chargee by way of security . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Legal Professions, Costs

Updated: 07 July 2022; Ref: scu.245332

The Scottish Lion Insurance Company Ltd, Re Sanction of A Scheme of Arrangement: SCS 8 Mar 2006

Sanction had been sought for a scheme of arrangement on the winding up of an insurance company. There were objections. The original scheme had been proposed under English law, and it would be inappropriate for a Scottish court to try to sanction such an arrangement. Payment of et fess of Engliah lawyers was sought.
Held: the court could not sanction the payment in the manner requested. The court set out how the Auditor must look at the English solicitor’s fee account.

Citations:

[2006] ScotCS CSOH – 37

Links:

Bailii

Statutes:

Companies Act 1985 425, Court of Session Act 1988, Interpretation Act 1978 811

Jurisdiction:

Scotland

Citing:

Cited – Wilson v Craig 1983
. .
Cited – Wimpey Construction (UK) Ltd v Martin Black and Co (Wire Ropes) Ltd 1988
The provisions of the Table of Fees under the Rules of Court were only applicable to Scottish solicitors. The court set out how fees incurred to solicitors practising outside Scotland are recovered in a Scottish taxation of expenses. In summary: 1. . .
Cited – Laing v Scottish Arts Council SCS 15-Dec-2000
A Lord Ordinary has power to correct an interlocutor to bring it into line with the court’s original intention. . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency, Costs

Updated: 07 July 2022; Ref: scu.238902

Clark v Watson: 1982

Two dentists practised in partnership. The co-partner said that on the death of one, to his estate should be paid ‘the Capital standing to the credit of the deceased Partner in the Accounts of the Partnership’. The court was asked whether that provision would require accounts to be taken as at the date of death.
Held: The practice would have to draw up accounts to the date of death, but: ‘If this conclusion is incorrect and, contrary to my opinion, the phrase ‘the Accounts of the Partnership’ in cl. Fourteenth falls to be construed as meaning inter alia a balance sheet as at 31 March 1977, it nevertheless follows from my opinion that there is nothing in this contract of copartnery to take it outwith the scope of the general rule that the pursuer qua executrix of the deceased is entitled to have the assets entered at their fair value in a fresh balance sheet as at 31 March 1977. This is certainly so if the deceased is not proved to have approved these existing accounts prepared as at 31 March 1977. Although I have heard no debate on what would be the effect of his approval of the accounts, I venture to think that his approval would not bind the pursuer to accept payment in accordance with these accounts. They were prepared upon the assumption that the partnership would continue. The deceased may have agreed to the assets being inserted at a book value in accounts prepared upon that assumption, but I do not, as at present advised, see how the deceased’s approval of accounts for that purpose can bind the pursuer to accept that valuation of the assets for the purpose of obtaining payment of the deceased’s share of capital on dissolution of the partnership by his death.’

Judges:

Lord Dunpark

Citations:

1982 SLT 450

Jurisdiction:

Scotland

Cited by:

Cited – In Re White (Dennis) Deceased; White v Minnis and Another CA 25-May-2000
A family partnership had carried freehold property at its historic cost value in the books, rather than at a market value. After the death of one partner the share came to be valued.
Held: Being a family partnership there was presumption that . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 07 July 2022; Ref: scu.238867

Noble v Noble: OHCS 1965

A father took his son into a farming partnership. The agreement recited that they agreed that ‘the heritable property should be taken as of the value of eight thousand pounds, but which is burdened with a heritable security for three thousand five hundred pounds’. Proper books of account were to be kept. Until 1963 the books of account were prepared on the basis of those values. In 1963 the father sought a declaration that he was entitled to have the capital value of the assets of the partnership entered in the balance sheet at a real and not an arbitrary or notional value.
Held: The issue is one of construction: what did the partners intend by the agreement which they made. Lord Strachan, sitting in the Outer House of the Court of Session, granted the declaration. As to Cruikshank v Sutherland: ‘The fact that Cruikshank was dealing with the share of a deceased partner is not, in my opinion, a material ground for distinguishing it from the present case. Similar issues are involved in this case, because under clause seventh of the contract a retiring partner or the representatives of a deceased partner are to be paid the sum at his credit as shown in the last preceding balance sheet. The same issues are therefore raised, but ab ante. It was argued for the defender, however, that there is vital distinction between Cruikshank and the present case in respect that the agreement that the heritable property is to be taken as of the value of andpound;8,000 laid down a definite figure which was to be adopted in preparing the accounts and that it therefore cannot be said that the contract is silent as to the principle to be adopted in entering the heritable property. That point is the crux of the case, and with some hesitation, I have come to the opinion that the narrative references in the contract and the disposition cannot reasonably be read as meaning that the figure of andpound;8,000 was to be entered in every balance sheet. It was a figure which was agreed for the purpose of fixing the capital of the company but on a construction of the whole deeds I find insufficient warrant for holding that it was intended to be a permanent valuation to be entered in every balance sheet. If that were so, a retiring or deceased partner would have no share whatever in any increase in the market value of the property, and if such an apparently unfair result had been intended, I think it would have been provided for in the eight clauses in which the terms and conditions of the partnership are reduced to writing, and would not have been left to be inferred from the narrative clauses. In my opinion, therefore, the contract is silent as to the principle to be adopted in framing the balance sheet, and Cruikshank is not distinguishable on that ground.’
Lord Clyde: ‘In my opinion the provision requiring the keeping of proper books annually balanced and regularly audited requires the inclusion in the balance sheet of the assets of the partnership at their true value at the end of the year in question. The language of cl.6 of the contract of co-partnery will not therefore be complied with if any of the assets, one of which is the farm itself, is entered at a mere nominal value which was fixed by agreement between the parties when the contract was made. I can find nothing in art. 6 of the contract to support the view that the value of the farm itself – the main asset – was to be frozen year by year at a constant figure throughout the partnership . . . It was contended by the defender that in solicitors’ partnership agreements it is quite common to provide that the heritable property in which the business is carried on should be entered at a constant figure in the balance sheets of the partnership throughout its term. It is of course quite legitimate for parties to make such a provision, but clear language to that effect is essential. There is no such provision in the present case.’
Lord Migdale: ‘As I understood their arguments counsel on both sides are agreed that it is always open to partners to provide that an asset acquired by the partnership should continue to appear in the partnership books at its original value. The question raised here is not whether it can be so agreed but whether in this case it was so agreed.’

Judges:

Lord Migdale, Lord Strachan, Lord Clyde

Citations:

[1965] SLT 415

Jurisdiction:

Scotland

Citing:

Cited – Cruikshank v Sutherland HL 1923
The executors of a deceased partner of the respondents sought relief. The assets had been taken over from an earlier partnership between the parties and had been brought into the accounts of the new partnership at the values at which they had stood . .

Cited by:

Cited – In Re White (Dennis) Deceased; White v Minnis and Another CA 25-May-2000
A family partnership had carried freehold property at its historic cost value in the books, rather than at a market value. After the death of one partner the share came to be valued.
Held: Being a family partnership there was presumption that . .
Cited – In Re White (Dennis) Deceased; White v Minnis and Another CA 25-May-2000
A family partnership had carried freehold property at its historic cost value in the books, rather than at a market value. After the death of one partner the share came to be valued.
Held: Being a family partnership there was presumption that . .
Appeal from – Noble v Noble IHCS 26-Jan-1966
. .
Cited – Thom’s Executrix v Russel and Aitken 1983
The court was asked as to how the value of the interest of a deceased partner was to be calculated.
Held: There had been prior dealings at book value as between the partners, and the payment of the deceased partner’s share was restricted to . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 07 July 2022; Ref: scu.238858

Thom’s Executrix v Russel and Aitken: 1983

The court was asked as to how the value of the interest of a deceased partner was to be calculated.
Held: There had been prior dealings at book value as between the partners, and the payment of the deceased partner’s share was restricted to book value of the capital. The court considered the case law and ‘That is sufficient for the disposal of the case but there is another and equally cogent reason for reaching the same conclusion namely, the actings of the parties under the contract. It was clearly recognised in the three cases to which I have referred that even if the contract is silent as to the accounting principles to be applied fair market valuations of assets will not be required to appear in the accounts if it can reasonably be inferred from the actings of the partners that they intended otherwise. ‘ and ‘Taking all the foregoing factors into account I conclude that even if the correct position were that the contract of co-partnery were silent on the matter nevertheless the actings of the partners thereunder and under the two preceding contracts demonstrate clearly that there was no intention on their part that a partner leaving the partnership either by retiral or by death should receive his share calculated other than by reference to book value.’

Judges:

Lord Jauncey

Citations:

1983 SLT 335

Jurisdiction:

Scotland

Citing:

Cited – Cruikshank v Sutherland HL 1923
The executors of a deceased partner of the respondents sought relief. The assets had been taken over from an earlier partnership between the parties and had been brought into the accounts of the new partnership at the values at which they had stood . .
Cited – Noble v Noble OHCS 1965
A father took his son into a farming partnership. The agreement recited that they agreed that ‘the heritable property should be taken as of the value of eight thousand pounds, but which is burdened with a heritable security for three thousand five . .
Cited – Shaw v Shaw OHCS 1968
‘The authorities to which I was referred, including, in particular, Noble v Noble; Inner House, 28th January 1966 (unreported), and Cruickshank’s Trustees v Sutherland, satisfy me that, as a general principle, where in a partnership it is necessary . .

Cited by:

Cited – In Re White (Dennis) Deceased; White v Minnis and Another CA 25-May-2000
A family partnership had carried freehold property at its historic cost value in the books, rather than at a market value. After the death of one partner the share came to be valued.
Held: Being a family partnership there was presumption that . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 07 July 2022; Ref: scu.238864

Attorney-General v Boden: 1912

There was a partnership between a father and his two sons. The sons were obliged to devote their whole time to the practice, the father only so much time as he wished. On his death the sons were to pay out to his estate the value of the capital but not including any charge for goodwill. The revenue sought to bring in the father’s share of the goodwill.
Held: Allowing for the different obligations, the sons acquired their father’s share in the goodwill as bona fide purchasers for value. Where it can be shown that the partnership agreement represented a true bargain, it was arguable that the only asset that passed for estate duty purposes was the right of the estate to receive the payment provided for in the agreement.

Citations:

[1912] 1 KB 539

Jurisdiction:

England and Wales

Cited by:

Cited – In Re White (Dennis) Deceased; White v Minnis and Another CA 25-May-2000
A family partnership had carried freehold property at its historic cost value in the books, rather than at a market value. After the death of one partner the share came to be valued.
Held: Being a family partnership there was presumption that . .
Cited – White v Minnis and Another ChD 18-Jan-1999
On the dissolution of a partnership, the valuation of assets was to be in accordance with the partnership deed but in the absence of explicit guidance property was to be valued at the date of dissolution and not at an historic value used in . .
Lists of cited by and citing cases may be incomplete.

Company, Taxes – Other

Updated: 07 July 2022; Ref: scu.238869

Hunter v Dowling: CA 1893

The articles of partnership between the parties required an annual account. A retiring or deceased partner was to be paid out ‘at the amount standing to his credit in the last balance sheet which shall have been signed previously to the date of such retirement or death.’ On the death of a partner on 10 April 1891, no account had been taken for the year ending 31 March 1891. The question was whether his share should be ascertained by reference to the previous year’s account (which had been taken and signed) or whether the correct course was to direct that an account be taken for the year to 31 March 1891 and ascertain the share by reference to that account. A literal construction of the words ‘shall have been signed’ would have led to the conclusion that the relevant account was that for the year ending 31 March 1890.
Held: The Court rejected that construction. It ought to act on the basis that that which ought to be done must be treated as if it had been done. From 31 March 1891 each partner had an accrued right under clause 15 to have an account taken as at that date; and the personal representatives of a partner who died after that day had a right to be paid out as if that had been done.

Citations:

[1893] 3 Ch 212

Jurisdiction:

England and Wales

Citing:

Followed – Pettyt v Janeson 1819
. .

Cited by:

Cited – In Re White (Dennis) Deceased; White v Minnis and Another CA 25-May-2000
A family partnership had carried freehold property at its historic cost value in the books, rather than at a market value. After the death of one partner the share came to be valued.
Held: Being a family partnership there was presumption that . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 07 July 2022; Ref: scu.238860

Halton International Inc Another v Guernroy Ltd: CA 27 Jun 2006

The parties had been involved in investing in an airline to secure its future, but it was now said that one party had broken the shareholders’ or voting agreement in not allowing further investments on a pari passu basis. The defendants argued that the claim was out of time unless the claimant could bring the case within section 21 of the 1980 Act.
Held: The appeal failed. The property was held as trustee, and the exception to the limitation period applied.
‘Section 21(1) provides an exception to the ordinary limitation rule that civil actions are barred after six years. Such an exception needs to be clearly justified by reference to the statutory language and the policy behind it. It is important therefore to keep in mind the reasoning behind the exception. It is not about culpability as such; fraud may not be sufficient to avoid the ordinary rule.[1] It is about deemed possession: the fiction that the possession of a property by a trustee is treated from the outset as that of the beneficiary. In the words of Millett LJ, the possession of the trustee is ‘taken from the first for and on behalf of the beneficiaries’ and is ‘consequently treated as the possession of the beneficiaries’. An action by the beneficiary to recover that property is not time-barred, because in legal theory it has been in his possession throughout.’

Judges:

Sir Andrew Morritt Ch, Lord Justice Tuckey, Lord Justice Carnwath

Citations:

[2006] WTLR 1241, [2006] EWCA Civ 801

Links:

Bailii

Statutes:

Limitation Act 1980 21(1)

Jurisdiction:

England and Wales

Citing:

Appeal From – Halton International Inc (Holding) and Another v Guernroy Ltd ChD 9-Sep-2005
Parties had entered into a shareholders’ agreement as to voting arrengemets within a company. Thay disputed whether votes had been used in reach of that agreement, particularly as to the issue of new shares and their allotment, but the court now . .
Cited – Keech v Sandford ChD 1726
Trustee’s Renewed Lease also Within Trust
A landlord refused to renew a lease to a trustee for the benefit of a minor. The trustee then took a new lease for his own benefit. The new lease had not formed part of the original trust property; the minor could not have acquired the new lease . .
Cited – DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH v Koshy and Other (No 3); Gwembe Valley Development Co Ltd (in receivership) v Same (No 3) CA 28-Jul-2003
The company sought to recover damages from a director who had acted dishonestly, by concealing a financial interest in a different company which had made loans to the claimant company. He replied that the claim was out of time. At first instance the . .
Cited – JJ Harrison (Properties) Ltd v Harrison CA 11-Oct-2001
A director had bought land belonging to the company, without disclosing its development potential.
Held: He had acquired the property as a constructive trustee for the company, and was accordingly accountable for it. . .
Cited – Taylor v Davies PC 19-Dec-1919
(Ontario) An assignee for the benefit of creditors conveyed mortgaged property to the mortgagee in satisfaction of part of the debt due to him. The mortgagee was also one of the inspectors required by the Canadian legislation to supervise the . .
Cited – Clarkson and Another v Davies and Others PC 23-Oct-1922
Ontario – Discussing the Taylor case, the Board said: ‘ . . it was there laid down that there is a distinction between a trust which arises before the occurrence of the transaction impeached and cases which arise only by reason of that transaction.’ . .
Cited – Clarkson v Davies PC 1923
In a case involving fraud, referring to Taylor v Davies, Lord Justice Clerk said that: ‘it was there laid down that there is a distinction between a trust which arises before the occurrence of the transaction impeached and cases which arises only by . .
Cited – Regal (Hastings) Ltd v Gulliver HL 20-Feb-1942
Directors Liability for Actions Ouside the Company
Regal negotiated for the purchase of two cinemas in Hastings. There were five directors on the board, including Mr Gulliver, the chairman. Regal incorporated a subsidiary, Hastings Amalgamated Cinemas Ltd, with a share capital of 5,000 pounds. There . .
Cited – Paragon Finance Plc (Formerly Known As National Home Loans Corporation Plc v D B Thakerar and Co (a Firm); Ranga and Co (a Firm) and Sterling Financial Services Limited CA 21-Jul-1998
Where an action had been begun on basis of allegations of negligence and breach of trust, new allegations of fraud where quite separate new causes of claim, and went beyond amendments and were disallowed outside the relevant limitation period. . .

Cited by:

Cited – Williams v Central Bank of Nigeria SC 19-Feb-2014
Bank not liable for fraud of customer
The appellant sought to make the bank liable for a fraud committed by the Bank’s customer, the appellant saying that the Bank knew or ought to have known of the fraud. The court was asked whether a party liable only as a dishonest assistant was a . .
Lists of cited by and citing cases may be incomplete.

Company, Contract, Limitation

Updated: 07 July 2022; Ref: scu.242876

Elite Business Systems UK Ltd v Price: CA 27 Jun 2005

The claimant sought to claim money from a father and son, saying they were in business in partnership. The father denied this but had opened a bank account in his own name, describing himself as trading under the son’s business name, and the son had represented to the claimant that he was in partnership with his father.
Held: The father’s appeal succeeded. The opening of an account under a name did not represent that the father was in business with the son trading under a similar name.

Citations:

[2005] EWCA Civ 920

Links:

Bailii

Statutes:

Partnership Act 1890 14(1)

Jurisdiction:

England and Wales

Company

Updated: 06 July 2022; Ref: scu.229198

Bermuda Bar Council v Walkers (Bermuda) Ltd: PC 10 Jun 2019

(Bermuda) The principal question in this appeal is the nature of foreign control over a local company which would prevent it from being ‘controlled by Bermudians’ and thus require it to be licensed by the Minister.

Judges:

Lord Reed, Lord Kerr, Lord Hodge, Lord Briggs, Lady Arden

Citations:

[2019] UKPC 25

Links:

Bailii

Jurisdiction:

Commonwealth

Company

Updated: 06 July 2022; Ref: scu.638483

Zahid v M Young Legal Associates Ltd and others: CA 16 May 2006

Is it possible for a person to be a partner in a firm, and thus liable jointly with the other partners to creditors of the firm, even if his agreement with them is not that he should be entitled to participate in its profits but that he should be paid by the firm a specified sum, irrespective of profits, for work to be done by him on its behalf?
Held: There is no minimum threshold that has to be reached in relation to a person’s rights to (a) profits or (b) involvement in management before he can be regarded as a partner. The question is simply whether, by their actions, the parties intended to create a partnership. A partner need not be remunerated by reference to profit and it is no bar to being a partner that he does not make any capital contribution, although that may be a factor pointing against finding that a partnership has been created.
Hughes LJ said: ‘the partners are free under the [1890] Act to arrange for the remuneration of themselves in any manner they choose, including by agreement that one or more shall receive specific sums, or that one or more receive nothing, in either case irrespective of profits’.
Wilson LJ cited a passage from a book in which there was reference to a partner who ‘receives all or most of his remuneration in the form of a salary rather than a simple share of profits’.

Judges:

Tuckey, Wilson, Hughes LJJ

Citations:

[2006] EWCA Civ 613, [2006] 1 WLR 2562

Links:

Bailii

Statutes:

Partnership Act 1890

Jurisdiction:

England and Wales

Cited by:

Cited – Tiffin v Lester Aldridge Llp EAT 16-Nov-2010
EAT CONTRACT OF EMPLOYMENT – Whether established
The Claimant, who is a solicitor, became a salaried partner in a partnership, which became a Limited Liability Partnership, which was the Respondent. The . .
Cited – Clyde and Co Llp and Another v Bates van Winkelhof CA 26-Sep-2012
The claimant was a solicitor partner with the appellant limited liability partnership at their offices in Tanzania. She disclosed what she believed to be money laundering by a local partner. She was dismissed. She had just disclosed her pregnancy . .
Cited – Hosking v Marathon Asset Management Llp ChD 5-Oct-2016
Loss of agent’s share for breach within LLP
The court was asked whether the principle that a fiduciary (in particular, an agent) who acts in breach of his fiduciary duties can lose his right to remuneration, is capable of applying to profit share of a partner in a partnership or a member of a . .
Cited – Hosking v Marathon Asset Management Llp ChD 5-Oct-2016
Loss of agent’s share for breach within LLP
The court was asked whether the principle that a fiduciary (in particular, an agent) who acts in breach of his fiduciary duties can lose his right to remuneration, is capable of applying to profit share of a partner in a partnership or a member of a . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 06 July 2022; Ref: scu.241722

In Re Sharpe: 1892

The misapplication of company money in the form of ultra vires payments of interest to shareholders was treated as a breach of trust by the directors.

Citations:

[1892] 1 Ch 154

Jurisdiction:

England and Wales

Cited by:

Cited – DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH v Koshy and Other (No 3); Gwembe Valley Development Co Ltd (in receivership) v Same (No 3) CA 28-Jul-2003
The company sought to recover damages from a director who had acted dishonestly, by concealing a financial interest in a different company which had made loans to the claimant company. He replied that the claim was out of time. At first instance the . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 06 July 2022; Ref: scu.187431

Nichols v Evens: 1883

Judges:

Fry J

Citations:

(1883) 22 Ch 611

Jurisdiction:

England and Wales

Cited by:

Cited – Malhotra v Dhawan CA 26-Feb-1997
There had been litigation as to the payment due on fees earned during the partnership. One party had destroyed the evidence which would have settled many issues. The court discussed the principle that it should presume all against a destroyer of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 06 July 2022; Ref: scu.193791

Bourne and 101 Othes v The Charit-Email Technology Partnership Llp: ChD 23 Jul 2009

Companies Court application under s. 130(2) of the Insolvency Act 1986 for permission to commence proceedings against the respondent, which is a limited liability partnership in liquidation. The application is in effect to join the respondent to proceedings which have already been commenced in the Commercial Court.

Judges:

Proudman J

Citations:

[2009] EWHC 1901 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986 130(2)

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 05 July 2022; Ref: scu.361468

Shepherds Investments Ltd and Another v Walters and others: ChD 12 Apr 2006

The claimant company accused former directors and employee of setting up a competing business, of diverting business opportunities and of misusing confidential information. They said that they had acted in breach not only of their fiduciary obligations but their implied obligation of fidelity the moment that they procured the services of attorneys in the Cayman Islands to set up the rival business.
Held: On the facts, a former employee was also in breach of obligations as a fiduciary, whether or not he was to be regarded as a director, and that he was in breach of his duty of fidelity.
Etherton J said: ‘What the cases show, and the parties before me agree, is that the precise point at which preparations for the establishment of a competing business by a director become unlawful will turn on the actual facts of any particular case. In each case, the touchstone for what, on the one hand, is permissible, and what, on the other hand, is impermissible unless consent is obtained from the company or employer after full disclosure, is what, in the case of a director, will be in breach of the fiduciary duties to which I have referred or, in the case of an employee, will be in breach of the obligation of fidelity. It is obvious, for example, that merely making a decision to set up a competing business at some point in the future and discussing such an idea with friends and family would not of themselves be in conflict with the best interests of the company and the employer. The consulting of lawyers and other professionals may, depending on all the circumstances, equally be consistent with a director’s fiduciary duties and the employee’s obligation of loyalty. At the other end of the spectrum, it is plain that soliciting customers of the company and the employer or the actual carrying on of trade by a competing business would be in breach of the duties of the director and the obligations of the employee. It is the wide range of activity and decision making between the two ends of the spectrum which will be fact sensitive in every case.’

Judges:

Etherton J

Citations:

[2006] EWHC 836 (Ch), [2007] 2 BCLC 202, [2007] FSR 15, [2007] IRLR 110

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Helmet Integrated Systems Ltd v Tunnard and others CA 15-Dec-2006
Whilst employed by the claimants as a salesman, the defendant came to want to develop his idea for a modular helmet suitable for fire-fighters and others. He took certain steps including showing the proposal confidentially to a competitor, and then . .
Lists of cited by and citing cases may be incomplete.

Torts – Other, Financial Services, Company

Updated: 05 July 2022; Ref: scu.240440

Capital Bank Ad v Bulgaria: ECHR 24 Nov 2005

The courts of Bulgaria had decided that, on a winding-up petition, the question of the company’s insolvency was determined by a decision of the Central Bank of Bulgaria to revoke the company’s banking licence because it was insolvent. It had been held by the Bulgarian Supreme Court that the Central Bank’s decision to that effect was not one which could be reviewed by the courts.
Held: That decision was a breach of article 6(1) because it amounted to a surrender of jurisdiction by the courts which was not justified.

Citations:

49429/99, [2005] ECHR 752, (2007) 44 EHRR 48

Links:

Worldlii, Bailii

Statutes:

European Convention on Human Rights 6(1)

Cited by:

Cited – Burwell v Director of Public Prosecutions Admn 1-May-2009
The defendant appealed against the decision of the Magistrates to accept a prosecutor’s certificate as to compliance with time limits for commencing the prosecution. He argued that the police had all the evidence in their possession at an earlier . .
Lists of cited by and citing cases may be incomplete.

Human Rights, Company, Insolvency

Updated: 05 July 2022; Ref: scu.239551

Halton International Inc (Holding) and Another v Guernroy Ltd: ChD 9 Sep 2005

Parties had entered into a shareholders’ agreement as to voting arrengemets within a company. Thay disputed whether votes had been used in reach of that agreement, particularly as to the issue of new shares and their allotment, but the court now considered whether the claim was out of time. That issue depended upon whether a trust had been created.
Patten J followed Gwembe in holding that the claim fell within class 2: ‘On the Claimants’ case (Guernroy) acquired the shares through its own breach of duty in circumstances which give rise to what amounts to a remedial constructive trust. The case can be distinguished from the position of (eg) a director of a company who controls the property of the company and owes pre-existing duties to the company in respect of it: see JJ Harrison (Properties) Ltd v Harrison [2002] 1 BCLC 162. Guernroy owed no duties to anyone in respect of the unissued share capital of BMed. The company issued the shares in return for the issue price which was paid. The Claimants’ case is that the acquisition of the shares constituted a breach of duty to the existing shareholders, but it is not alleged that Guernroy in any sense held the unissued shares for the Claimants prior to the alleged breach. The most that can be said is that it owed fiduciary duties to the Claimants in respect of the voting powers and that it is through the alleged misuse of those powers that the shares have been acquired. In my judgment, this brings the case within class 2: see Gwembe Valley Development Co. Ltd v Koshy

Judges:

Patten J

Citations:

[2005] EWHC 1968 (Ch)

Links:

Bailii

Statutes:

Limitation Act 1980 21(1), Trustee Act 1925

Jurisdiction:

England and Wales

Citing:

Cited – Re Coomber; Coomber v Coomber CA 2-Jan-1911
The Coomber family sold beer in Battersea. Coomber Senior had increasingly relied on his second son. After his father’s death, the second son continued to run the business. His mother shortly afterwards assigned both the licence and the premises to . .
Cited – Regal (Hastings) Ltd v Gulliver HL 20-Feb-1942
Directors Liability for Actions Ouside the Company
Regal negotiated for the purchase of two cinemas in Hastings. There were five directors on the board, including Mr Gulliver, the chairman. Regal incorporated a subsidiary, Hastings Amalgamated Cinemas Ltd, with a share capital of 5,000 pounds. There . .
Cited – Phipps v Boardman HL 3-Nov-1966
A trustee has a duty to exploit any available opportunity for the trust. ‘Rules of equity have to be applied to such a great diversity of circumstances that they can be stated only in the most general terms and applied with particular attention to . .
Cited – Hospital Products Ltd v United States Surgical Corporation 25-Oct-1984
High Court of Australia – A solicitor’s duty of loyalty to his client’s interest, and his duty to respect his client’s confidences, have their roots in the fiduciary nature of the solicitor-client relationship, but may have to be moulded and . .
Cited – Henderson v Merrett Syndicates Ltd HL 25-Jul-1994
Lloyds Agents Owe Care Duty to Member; no Contract
Managing agents conducted the financial affairs of the Lloyds Names belonging to the syndicates under their charge. It was alleged that they managed these affairs with a lack of due careleading to enormous losses.
Held: The assumption of . .
Cited – Mothew (T/a Stapley and Co) v Bristol and West Building Society CA 24-Jul-1996
The solicitor, acting in a land purchase transaction for his lay client and the plaintiff, had unwittingly misled the claimant by telling the claimant that the purchasers were providing the balance of the purchase price themselves without recourse . .
Cited – Swindle, Fillmore, Cox, Rowett v Harrison and Harrison CA 25-Mar-1997
Negligence short of fraud gave no right to damages for non-disclosure. . .

Cited by:

Cited – Williams v Central Bank of Nigeria SC 19-Feb-2014
Bank not liable for fraud of customer
The appellant sought to make the bank liable for a fraud committed by the Bank’s customer, the appellant saying that the Bank knew or ought to have known of the fraud. The court was asked whether a party liable only as a dishonest assistant was a . .
Appeal From – Halton International Inc Another v Guernroy Ltd CA 27-Jun-2006
The parties had been involved in investing in an airline to secure its future, but it was now said that one party had broken the shareholders’ or voting agreement in not allowing further investments on a pari passu basis. The defendants argued that . .
Lists of cited by and citing cases may be incomplete.

Company, Limitation

Updated: 05 July 2022; Ref: scu.239285

Conlon and Another v Simms: ChD 9 Mar 2006

Partners in a solicitors practice fell out after one was struck off by the Law Society. The remaining partners claimed damages alleging that they had been drawn into the partnership after misrepresentations by the defendant about it, and sought to plead the findings by the Solicitors Disciplinary Tribunal of dishonesty in the defendant. The SDT had found proven allegations relating to potential dishonesty and breaches of anti-fraud guidance. Investment schemes had promised rewards which were never going to be attainable.
Held: The partners should have specifically pleaded any particular allegations supported by the SDT findings, but could not import them as a whole.

Judges:

Collins J

Citations:

[2006] EWHC 401 (Ch), [2006] 2 All ER 1024

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Simms and others v The Law Society CA 12-Jul-2005
The appellant challenged intervention proceedings brought against his solicitors practice by the respondent. Following disciplinary proceedings, the Society had obtained summary judgment rejecting the application, and awarding costs. The solicitor . .
Cited – Simms v Law Society Admn 17-Mar-2005
The appellant challenged being struck of the solicitors roll.
Held: ‘The most serious finding of the Tribunal was, of course, that [Mr Simms] was dishonest. We agree with the Tribunal that the pattern of behaviour by [Mr Simms] establishes . .

Cited by:

Cited – St Paul Travelers Insurance Co Ltd v Okporuah and others ChD 10-Aug-2006
The first defendant had acquired several properties, and was due to make repayments greatly in excess of his income. A further defendant, his brother, was a solicitor who was known to have been involved in mortgage fraud and was suspected of having . .
Appeal from – Simms v Conlon and Another CA 20-Dec-2006
Solicitors within a practice sued each other, and one wished to plead the fact of a finding of professional misconduct.
Held: The defendant’s appeal succeeded. It was not an abuse for the appellant to continue to assert his innocence, and the . .
Cited – Michael Wilson and Partners Ltd v Emmott ComC 8-Jun-2011
The claimant challenged an arbitration award made concerning the agreement under which the defendant had been admitted to partnership. MWP contended that the Tribunal were guilty of a large number of serious irregularities in their conduct of the . .
Lists of cited by and citing cases may be incomplete.

Company, Legal Professions

Updated: 05 July 2022; Ref: scu.238948

Anglo Petroleum Ltd v TFB (Mortgages) Ltd: ChD 24 Feb 2006

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 genuine commercial justification it must also equally be lawful to the company to assist that repayment by providing security’.

Judges:

Peter Smith J

Citations:

[2006] EWHC 258 (Ch)

Links:

Bailii

Statutes:

Companies Act 1985

Jurisdiction:

England and Wales

Citing:

Cited – Gradwell (PTY) v Rostra Printers Ltd 1959
(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 . .
Cited – Chaston v SWP Group Plc CA 20-Dec-2002
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 . .
Cited – Armour Hick Northern Ltd v Whitehouse; Armour Trust Ltd ChD 1980
A vendor company was assisted by financial assistance given by a subsidiary.
Held: The use of money by a company to repay its existing indebtedness would not normally fall within the concept of the company giving financial assistance to . .
Cited – Charterhouse Investment Trust Ltd v Tempest Diesels Ltd ChD 1986
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 . .
Cited – In re Wellington Publishing Company Ltd 1973
(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 . .
Cited – Pearce v Brooks 1866
The contract was for the hire of an ornamental brougham to a prostitute which was supplied with knowledge that it would be used ‘as part of her display’. She returned it in a damaged condition, and refused to make any payments under the contract as . .

Cited by:

Cited – Parkingeye Ltd v Somerfield Stores Ltd CA 17-Oct-2012
The claimant company operated parking management for the defendant, charging customers for overparking. The defendant came to believe that the claimant’s behaviour was over-aggressive, and the use of falsehoods, and terminated the contract. The . .
Appeal from – Anglo Petroleum Ltd and Another v TFB (Mortgages) Ltd CA 16-May-2007
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 . .
Lists of cited by and citing cases may be incomplete.

Company, Contract

Updated: 05 July 2022; Ref: scu.238708

Tea-Cegos and Stg v Commission (Law Relating To Undertakings) T-383/05: ECFI 14 Feb 2006

ECJ Public contracts – Community tendering procedure – Recruitment of technical assistance for short-term expertise for exclusive benefit of third countries benefiting from external aid – Rejection of tenders

Citations:

T-383/05, [2006] EUECJ T-383/05, [2006] EUECJ T-383/05

Links:

Bailii, Bailii

European, Company

Updated: 05 July 2022; Ref: scu.238518

C Evans and Sons Ltd v Spritebrand Ltd and another: CA 1985

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)

Judges:

Lord Justice Slade, Lord Justice Atkin

Citations:

[1985] 1 WLR 316

Statutes:

Copyright Act 1956 1(2)

Jurisdiction:

England and Wales

Cited by:

Cited – PLG Research Ltd and Another v Ardon International Ltd and Others ChD 25-Nov-1994
A patent infingement claim was met by the assertion that the material covered had been disclosed before the patent had been obtained. The court was asked as to the test of whether the information in a claim had been disclosed. Aldous J said: ‘Mr. . .
Cited – MCA Records Inc and Another v Charly Records Ltd and others (No 5) CA 5-Oct-2001
The court discussed the personal liability of a director for torts committed by his company: ‘i) a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the . .
Cited – Global Projects Management Ltd v Citigroup Inc and Others ChD 17-Oct-2005
GPM had acquired an internet domain name ‘citigroup.co.uk’. Citigroup alleged passing off and trade mark infringement. The claimant complained of an unjustified threat. The defendant counterclaimed, and sought summary judgment.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Company, Torts – Other

Updated: 05 July 2022; Ref: scu.221583

Senior Engineering Investments BV v Staatssecretaris van Financien: ECJ 12 Jan 2006

ECJ Directive 69/335 – Indirect taxes on the raising of capital – National rules taxing a (subsidiary) company by way of capital duty in respect of a contribution made by its parent company (the grandparent company) in favour of its subsidiary (a sub-subsidiary company) – Capital duty – Increase of capital – Payment ‘to the share premium account’ – Increase in the assets of the company – Increase in the value of shares – Provision of services by a member – Payment made by a member of a member – Payment to a subsidiary – ‘Real recipient’ – Levying of capital duty once only (in the Community) – Article 52 of the EC Treaty (now, after amendment, Article 43 EC) – Freedom of establishment – National practice exempting a (subsidiary) capital company from taxation only if its subsidiary (sub-subsidiary company) is also established in that Member State)

Citations:

[2007] STC 93, [2006] ECR I-525, [2006] EUECJ C-494/03, [2006] STI 201

Links:

Bailii

Jurisdiction:

European

Taxes – Other, Company

Updated: 04 July 2022; Ref: scu.237651

Cabvision Ltd v Feetum and others: CA 20 Dec 2005

The company challenged the appointment of administrative receivers, saying there had been no insolvency.
Held: No question arises of a derivative action arose here. The claimant had standing to apply for declaratory relief since they were directly affected by the appointment. As to the appointment itself ‘it is inconceivable that in enacting the relevant provisions of the 2002 Act Parliament intended to equate a power for a financier to appoint an administrative receiver with ‘step-in rights’.’ Accordingly the appointment had been invalid.

Judges:

Jonathan Parker LJ

Citations:

Times 02-Jan-2006, [2005] EWCA Civ 1601

Links:

Bailii

Statutes:

Insolvency Act 1986, Enterprise Act 2002, Limited Liability Partnerships Act 2000 14(1), Limited Liability Partnerships Regulations 2001 5

Jurisdiction:

England and Wales

Citing:

Cited – Foss v Harbottle 25-Mar-1843
Company alone may sue for legal wrong against it.
A bill was lodged by two of the proprietors of shares in a company incorporated by Act of Parliament, on their own and the other shareholders’ behalf. They claimed against three bankrupt directors, a proprietor, solicitor and architect charging them . .
Cited – Gouriet v Union of Post Office Workers HL 26-Jul-1977
The claimant sought an injunction to prevent the respondent Trades Union calling on its members to boycott mail to South Africa. The respondents challenged the ability of the court to make such an order.
Held: The wide wording of the statute . .
Cited – Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) CA 1982
A plaintiff shareholder cannot recover damages merely because the company in which he has an interest has suffered damage. He cannot recover a sum equal to the diminution in the market value of his shares, or equal to the likely diminution in . .
Cited – Meadows Indemnity Co Ltd v The Insurance Corporation of Ireland plc and Another CA 1989
A claim was made for declaratory relief.
Held: The Claimant, a re-insurer, did not have locus to claim a declaration that the main insurer could avoid the main contract of insurance, to which the Claimant was not a party. The court considered . .
Cited – Meadows Indemnity Co Ltd v The Insurance Corporation of Ireland plc and Another CA 1989
A claim was made for declaratory relief.
Held: The Claimant, a re-insurer, did not have locus to claim a declaration that the main insurer could avoid the main contract of insurance, to which the Claimant was not a party. The court considered . .
Cited – Meadows Indemnity Co Ltd v The Insurance Corporation of Ireland plc and Another CA 1989
A claim was made for declaratory relief.
Held: The Claimant, a re-insurer, did not have locus to claim a declaration that the main insurer could avoid the main contract of insurance, to which the Claimant was not a party. The court considered . .
Cited – In Re S (Hospital Patient: Court’s Jurisdiction) CA 6-Mar-1995
The carer of S sought a declaration that S’s wife and son were not entitled to remove him to Norway.
Held: The court may try an issue as to the patient’s care as between rival claimants as carers. It should not tightly restrict list of carers . .
Cited – Secretary of State for Trade and Industry v Jabble and Others CA 22-Jul-1997
The Secretary of State sought company director disqualification orders. The defendants challenged the administrative receivership, saying that the appointment of the administrative receiver was invalid, and hence that the conditions of section 6 . .
Cited – Re Kaytech International plc; Secretary of State for Trade and Industry v Kaczer and others CA 1999
Robert Walker LJ said that the expression ‘de facto director’ had been in use for a long time, and commented on the failure to distinguish in pleadings between pleas that someone was a shadow or a de facto director. The two different labels were not . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 04 July 2022; Ref: scu.236565

Commission v Greece C-96/05: ECJ 15 Dec 2005

ECJ (Law Relating To Undertakings) Failure of the State – Directive 2001/65 / EC – Annual accounts and consolidated accounts of certain types of companies – Failure to transpose within the prescribed period

Citations:

ECLI: EU: C: 2005: 793, [2005] EUECJ C-96/05

Links:

Bailii

Jurisdiction:

European

Company

Updated: 04 July 2022; Ref: scu.236399

Branch v Bagley and others: ChD 10 Mar 2004

Judges:

The Hon Mr Justice Richards

Citations:

[2004] EWHC 426 (Ch)

Links:

Bailii

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Cited by:

Appeal from – Branch v Bagley and others CA 16-Jun-2004
Application for permission to appeal from strike out of unfair prejudice petition. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 04 July 2022; Ref: scu.194411

Czarnikow Ltd v Centrala Handlu Zagranicznego Rolimpex: HL 1979

The sellers (Rolimpex), a state trading organisation, tried to rely on the actions of their own government as a defence to claims for non-performance of commercial contracts.
Held: The sellers were not an organ or department of the Polish government but an independent state enterprise, and had a good defence to liability, consequent upon an export ban imposed by the Polish government.
Viscount Dilhorne said: ‘The respondents are an organisation of the state. Under Polish law they have a legal personality. Though subject to directions by the appropriate minister who can tell them ‘what to do and how to do it’, as a state enterprise they make their own decisions about their commercial activities. They decide with whom they will do business and on what terms and they have considerable freedom in their day to day activities. They are managed on the basis of economic accountability and are expected to make a profit. They arbitrators . . rightly found as a fact that the respondents were not so closely connected with the government of Poland as to be precluded from relying on the ban imposed by the decree as government intervention.
The appellants also asserted that the respondents bought and sold for the state. This while no doubt true, does not . . help the appellants. The facts found by the arbitrators . . show that they were not a department of the government but have a separate identity. They were, it was found as a fact, employed as ‘a commission merchant’ to sell sugar intended for export on behalf of Sugar Industry Enterprises which were also state enterprises. ‘

Judges:

Lord Wilberforce, Lord Salmon

Citations:

[1979] AC 351

Jurisdiction:

England and Wales

Cited by:

Cited – Okta Crude Oil Refinery A D v Mamidoil-Jetoil Greek Petroleum Company S A and Another CA 17-Jul-2003
The parties had contracted to allow an exclusive right to deliver oil by tanker and to sell into Macedonia. The defendants claimed they were overborn, and claimed exemption under a force majeure clause.
Held: The acts which had made the . .
Cited – Okta Crude Oil Refinery A D v Mamidoil-Jetoil Greek Petroleum Company S A and Another CA 17-Jul-2003
The parties had contracted to allow an exclusive right to deliver oil by tanker and to sell into Macedonia. The defendants claimed they were overborn, and claimed exemption under a force majeure clause.
Held: The acts which had made the . .
Lists of cited by and citing cases may be incomplete.

Contract, Company, International

Updated: 04 July 2022; Ref: scu.184744

Secretary of State for Trade and Industry v Griffiths; Conway and Wassell; In Re Westmid Packing Services Ltd: CA 16 Dec 1997

Guidance given on what evidence should be admitted to affect the length of disqualification and conditions of Director’s disqualification.
A director’s duty to exercise his powers in the best interests of the company and to recognise the separate legal character of the company are essential attributes of fitness to be concerned in the management of a company. The duties are personal and inescapable. Lord Woolf MR: ‘A proper degree of delegation and division of responsibility is of course permissible, and often necessary, but total abrogation of responsibility is not. A board of directors must not permit one individual to dominate them and use them, as Mr Griffiths plainly did in this case. Mr Davis commented that the appellants’ contention (in their affidavits) that Mr Griffiths was the person who must carry the whole blame was itself a depressing failure, even then, to acknowledge the nature of a director’s responsibility. There is a good deal of force in that point.’

Citations:

Times 29-Dec-1997, [1997] EWCA Civ 3013, [1998] 2 All ER 124

Links:

Bailii

Statutes:

Company Directors Disqualification Act 1986

Jurisdiction:

England and Wales

Cited by:

Cited – The Secretary of State for Trade and Industry v Goldberg, Mcavoy ChD 26-Nov-2003
The Secretary of State sought a disqualification order. The director argued that one shoul not be made in the absence of some breach of legal duty, some dishonesty should be shown.
Held: The answer was a mixture of fact and law. A breach of . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Cited – Secretary of State for Business Enterprise and Regulatory Reform v Sullman and Another ChD 19-Dec-2008
An application was made to disqualify as a company director a former director of Claims Direct Limited. He had been accused of several actions which might justify a disqualification.
Held: The court found misconduct but delayed a decision on . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 04 July 2022; Ref: scu.143412

City of Glasgow Bank Liquidation (J C Cuninghame’s Case) John Charles Cuninghame v The Liquidators: HL 1 Jul 1879

Public Company – Winding-Up – Liability of Trustee – Where Stock Purchased by Trust – Want of Signature to Transfer – Authority.
Held ( affirming judgment of Court of Session) that where there was antecedent authority given to the law agent by a trustee to purchase stock in the City of Glasgow Bank, followed by subsequent recognition on the part of the trustee of the purchase of the stock in a letter of mandate to draw dividends, the trustee’s name was properly entered upon the bank’s register, and subsequently on the bank’s failure upon the list of contributories, and that it made no difference that the truster’s signature was not appended to the deed of transfer.
Observations per Lord Selborne and Lord Blackburn upon the decision of the House of Lords in Lumsden v. Buchanan with reference to the case of Dr Andrew Buchanan.

Judges:

Lord Chancellor (Cairns), Lord Hatherley, Lord O’Hagan, Lord Selborne, Lord Blackburn, and Lord Gordon

Citations:

[1879] UKHL 819, 16 SLR 819

Links:

Bailii

Jurisdiction:

Scotland

Company

Updated: 04 July 2022; Ref: scu.637966

City of Glasgow Bank Liquidation (Gillespie and Paterson’s Case) Gillespie and Paterson v The Liquidators: HL 1 Jul 1879

Public Company – Winding-up – Where Partners of a Firm held Stock for themselves and the Survivor for behoof of the Firm.
Two persons had carried on business for some years, when it was agreed to form a new firm with a third partner. Prior to the execution of the contract of copartnery, but with a view to the arrangements of the new firm, stock in a bank of unlimited liability was purchased, by the original partners and the transfer taken in favour of themselves, ‘and the survivor for behoof of the firm.’ The new partner was not a party to the transfer. The entry in the stock ledger was in similar terms. In a petition for rectification of the list of contributories, upon which the names of the two partners were entered, each being described as ‘trustee for’ the firm- held ( affirming judgment of Court of Session) that their names were rightly so entered, each being liable in solidum, and not merely for half the amount of stock held by them.

Judges:

Lord Chancellor (Cairns), Lord Hatherley, Lord O’Hagan, Lord Selborne, Lord Blackburn, and Lord Gordon

Citations:

[1879] UKHL 815, 16 SLR 815

Links:

Bailii

Jurisdiction:

Scotland

Company

Updated: 04 July 2022; Ref: scu.637965

Cree (Liquidator of The Bonnington Sugar Refining Co, Ltd) v Somervail and Others (Thomson’s Trustees): HL 20 Jun 1879

Public Company – Winding-up – List of Contributories – Purchase by Directors as Trustees on behalf of Company – Trafficking in Shares
The memorandum of association of a company limited under the Companies Act of 1862 provided that no transfer of any shares either upon a sale or in consequence of the bankruptcy of any shareholder should be valid or effectual without the consent of a majority of the other shareholders expressed in writing, but that if the other shareholders declined to consent to any such transfer they should be bound to take the shares at the price offered in a case of sale, or at the market price in other cases.
Certain of the directors of the company made a direct purchase of shares from the executors of a deceased partner, and paid for them out of the company funds. A transfer was prepared, and the directors’ names were subsequently entered in the register of shareholders with a notice of trust. In the winding-up of the company, which occurred upwards of a year afterwards, held that, apart from the question of the validity of the transaction, which was a matter for the company or those representing it, and following the decision in Oakes v. Turquand, August 15, 1867, L.E., 2H.L. 325, and Muir’s case, April 7, 1879, ante, p. 483, the directors’ names fall to be placed upon the list of contributories in the interests of the creditors, just like any other parties who professed to hold upon trust.
Opinions (in disagreement with the judgment of the Court of Session) that the purchase of the shares by the directors of the company was ultra vires, as being unauthorised by the memorandum of association.

Judges:

Lord Chancellor (Cairns), Lord Hatherley, Lord O’Hagan, Lord Blackburn, and Lord Gordon

Citations:

[1879] UKHL 666, 16 SLR 666

Links:

Bailii

Jurisdiction:

Scotland

Company

Updated: 04 July 2022; Ref: scu.637963

City of Glasgow Bank Liquidation – (Nelson Mitchell’s Case) – Nelson Mitchell, Petitioner v The Liquidators: HL 20 May 1879

Public Company – Sale of Bank Stock – Registering Sale after Stoppage of Company – Companies Act 1862, sec. 35
A sale of bank stock was made upon a stock exchange on 28th and 30th September, the settling-day being the 16th October. Before the settling-day the bank, who were the purchasers of the stock, suspended payment. On the 16th October, the bank having previously declined to execute a transfer of the stock, a transfer was tendered to them, but they declined to accept or register it. On the 22d a winding-up resolution was passed, following upon a notice of motion to that effect issued to the shareholders by circular on the 5th.
In a petition at the instance of the seller to have his name removed from the list of contributors in respect that the bank was real proprietor of the stock – held ( aff. the judgment of the Court of Session) that in the circumstances the directors were neither bound nor entitled to make the required alteration upon the register, and there was thus no ground for the contention that there had been ‘default’ or ‘unnecessary delay,’ under section 35 of the Companies Act 1862, in respect of their neglect to do so.
Opinion reserved as to the effect of the 1st section of Leeman’s Act (30 vict. cap. 29) upon the validity of the sale of stock in question, it having been averred that the brokers’ contract did not ‘set forth the person or persons in whose name or names’ the stock stood as registered proprietor at the date of the sale.

Judges:

Lord Chancellor (Cairns), Lord Hatherley, Lord O’Hagan, Lord Selborne, Lord Blackburn, and Lord Gordon

Citations:

[1879] UKHL 511, 16 SLR 511

Links:

Bailii

Jurisdiction:

Scotland

Company

Updated: 04 July 2022; Ref: scu.637960

City of Glasgow Bank Liquidation – (Bell’s Case) – Bell and Others (Lang’s Trustees) v The Liquidators: HL 20 May 1879

Public Company – Transfer of Shares – Entry on the Transfer Register where New Trustees Assumed – Companies Act 1862 (25 and 26 Vict. c. 89), sec. 25.
Trustees whose names were entered on the register of a joint-stock bank, registered but not formed under the Companies Act 1862, executed a deed of assumption of new trustees, which they intimated to the bank. The bank official made an entry of the terms of the deed in the stock ledger, following the previous entry, and giving the names and designations of the new trustees.
held ( affirming decision of the Court of Session) that they thereby duly became shareholders of the bank; and objections that the deed of assumption should have been entered in the transfer register, and that there was a want of compliance with the provisions of section 25 of the Companies Act 1862, repelled – the facts showing that it was with their full knowledge and consent that the trustees became shareholders in the bank, and that they had been regularly entered as such.
Held, in the case of a married female trustee, that if her name fell to be placed on the list of contributories, her husband’s name ought, under the 78th section of the Companies Act 1862, to be placed along with it, as the question of liability should be decided in his presence, and that it was not enough that the suit should be carried on by her ‘with the consent of her husband.’

Judges:

Lord Chancellor (Cairns), Lord Hatherley, Lord Penzance, Lord O’Hagan, Lord Selborne, and Lord Blackburn

Citations:

[1879] UKHL 500, 16 SLR 500

Links:

Bailii

Jurisdiction:

Scotland

Company

Updated: 04 July 2022; Ref: scu.637958

City of Glasgow Bank Liquidation – (Muir’s Case) Muir and Others (Murdoch’s Trustees), Petitioners v The Liquidators: HL 7 Apr 1879

Trust – Partnership – Liability of Trustees – Companies Act 1862 (25, and 26 Vict. cap. 89).
The City of Glasgow Bank was a joint-stock company formed in 1839 under a contract of copartnery, and subsequently incorporated under the Companies Act 1862.
Where notice of a trust appeared upon the register and in the other books and papers of the company, and stock belonging to the trust-estate had been transferred from the truster’s name to that of the trustees by means of a registered transfer- held that the trustees were partners of the company, and as such were personally liable for its debts, alike in questions with creditors and inter socios.
Observed per the Lord Chancellor (Cairns) that among the purposes of the permission to notice trusts on a register of shares was (1) to mark it as the property of a particular trust, that being a benefit to the beneficiaries rather than to the trustees; (2) to publish the fact that the shares are held on a joint-account with a right of survivorship; and (3) perhaps to enable a retiring trustee to remove his name from the register more easily than in the case of other joint-owners.

Judges:

Lord Chancellor (Cairns) Lord Hatherley, Lord Penzance, Lord O’Hagan, Lord Selborne, Lord Blackburn, and Lord Gordon

Citations:

[1879] UKHL 483, 16 SLR 483

Links:

Bailii

Jurisdiction:

England and Wales

Company

Updated: 04 July 2022; Ref: scu.637956

City of Glasgow Bank Liquidation – (Rer’s Case) Alan Ker (Fyfe’s Trustee) v The Liquidators: HL 20 May 1879

Public Company – Winding-up – Circumstances from which Authority to Register inferred.
The name of a trustee under a marriage-contract was by the instructions of the agent to the trust entered along with the names of his co-trustees in the register of members of a joint-stock company. The trustee himself never by any formal writing accepted office, nor did he directly authorise his name to be placed upon the list of shareholders. He, however, shortly after the marriage signed as trustee a warrant authorising payment of the dividend, and he accepted in the same capacity the transfer of some railway stock belonging to the trust. On more than one occasion he expressed a wish to resign, but without actually resigning. On the dissolution of the marriage he sent a formal declinature of office, which was accepted and acted upon by the other trustees.
held ( aff. judgment of Court of Session) that in the circumstances as proved he had by his actings accepted the office of trustee, and had assented to the transfer of stock into his name, and that even if he had resigned the trusteeship afterwards, which he had not, the resignation was inoperative, as it had not been communicated to the bank.

Judges:

Lord Chancellor (Cairns), Lord Hatherley, Lord O’Hagan, Lord Selborne, and Lord Gordon

Citations:

[1879] UKHL 507, 16 SLR 507

Links:

Bailii

Jurisdiction:

Scotland

Insolvency, Company

Updated: 04 July 2022; Ref: scu.637961

City of Glasgow Bank Liquidation – (Buchan’s Case) John Buchan v The Liquidators: HL 20 May 1879

Public Company – Winding-up – Trustees and Executors – Liability of Executor where Part of Executry Estate Consists of Shares in Joint-Stock Company – Personal and Representative Liability.
In the case of a testator holding shares in a joint-stock company, his executor may (1) have the shares transferred to his own name, and thereby become a partner in the company, or, in the event of his not desiring them so transferred, he may (2) have a reasonable time allowed him to sell the shares and to produce a purchaser who will take a transfer.
Opinion (per Lord Selborne) that where an executor merely produces his confirmation for the purpose of having it recorded in the books of a joint-stock company in which the testator held stock, and receives it back again with a certificate describing him as holder of the shares in terms having reference to his character of executor, he does not thereby necessarily incur personal liability, whatever entries may have been made in the company’s books, and notwithstanding the subsequent receipt of dividends by him for a series of years.
Opinion (per Lord Selborne) that trustees have not, in any proper sense of the word, a representative character, but that executors have.

Judges:

Lord Chancellor (Cairns), Lord Hatherley, Lord O’Hagan, Lord Selborne, and Lord Gordon

Citations:

[1879] UKHL 512, 16 SLR 512

Links:

Bailii

Jurisdiction:

Scotland

Company, Wills and Probate

Updated: 04 July 2022; Ref: scu.637959

City of Glasgow Bank Liquidation – (Tennent’s Case) Hugh Tennent v The Liquidators: HL 20 May 1879

Public Company – Partnership – Reduction of Contract – Fraud – Recission of Contract – Commencement of Winding-up – Act 25 and 26 Vict. c. 89 (Companies Act 1862), secs. 18, 38, 84, 130
A shareholder in a joint-stock bank, which was registered under the Companies Act of 1862, raised an action of reduction of his contract, alleging that he had been induced to purchase stock through the fraudulent misrepresentations of the directors and the manager. The summons was served on the day before that on which it was resolved to wind-up voluntarily, but after the bank had stopped payment, and after the directors had published a notice summoning a meeting of shareholders for the purpose of passing a resolution to wind up voluntarily, and also after certain men of business, who had been appointed by the directors to make an investigation into the affairs of the bank, had published a report which showed that there was a deficit of over pounds 5,000,000.
In a petition by the shareholder to have his name removed from the register of members and the list of contributories, and to stop calls- held ( aff. judgment of Court of Session) that after the advertisement of the notice of meeting the directors were not entitled to make any alteration in the status of the shareholders, whether by a transfer or by a repudiation of shares which would affect the rights of creditors of the company.
Observed by the Lord Chancellor (Cairns) that the question whether a contract to take shares in a company can be rescinded on the ground of fraud up to the date of the commencement of a winding-up must always depend upon the particular circumstances of the case.

Judges:

Lord Chancellor (Cairns), Lord Hatherley, Lord Selborne, and Lord Gordon

Citations:

[1879] UKHL 509, 16 SLR 509

Links:

Bailii

Jurisdiction:

Scotland

Company

Updated: 04 July 2022; Ref: scu.637962

Neilson v Mossend Iron Co: HL 4 Mar 1886

Where there is a partnership for a term of years, and it is, after the expiration of the term, continued at will, the presumption is that the new partnership is on the terms of the old so far as applicable, but so far only.
A clause in a contract of partnership provided that ‘if within three months before the termination of this contract the whole partners of the company shall not have agreed to carry on the business thereof, any one or more of them who may be desirous of retiring shall be entitled to do so, and shall immediately on the completion of the balance after mentioned be paid out by the partners electing to continue the business his share in the concern as the same shall be ascertained by a balance of the company’s books as at the termination of the contract, to be completed within not more than three months from said termination,’ and it provided for a certain mode of winding-up if the partners wished. The time for which the contract was to run expired, and the business was carried on as a partnership at will. Held ( alt. judgment of First Division) that this provision as to three months from a fixed period, the termination of the original contract, were inapplicable to a partnership-at-will, and therefore that that article was not carried into the partnership-at-will.

Judges:

Earl of Selborne, Lords Watson, Fitzgerald, and Ashbourne

Citations:

[1886] UKHL 867, 23 SLR 867, (1886)13 R (HL) 50

Links:

Bailii

Jurisdiction:

Scotland

Company

Updated: 04 July 2022; Ref: scu.637730

Pricewaterhousecoopers Llp v Carmichael: ComC 15 Mar 2019

Application by the Pw for an order restraining the defendant from breaching clause 13.10 of the PwC LLP members’ agreement. The application as issued originally sought injunctions restraining breach of various other post-termination restraints within part 13 of the MA, but those elements of the application have been compromised.

Citations:

[2019] EWHC 824 (Comm)

Links:

Bailii

Jurisdiction:

England and Wales

Company, Employment

Updated: 04 July 2022; Ref: scu.637504

Re Noble Group Ltd: ChD 2 Nov 2018

Citations:

[2018] EWHC 2911 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

See Also – Re Noble Group Ltd ChD 14-Nov-2018
Application by Noble Group Limited for an order sanctioning a scheme of arrangement between the Company and its Scheme Creditors . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 04 July 2022; Ref: scu.628962

Huntingdon Life Sciences Group Plc and Another v Stop Huntingdon Animal Cruelty and others: QBD 21 Oct 2005

The members of the anti-vivisection association appealed against an order for costs against the Association and its members at large.
Held: It was possible to make an order against an association and its un-named members. The association had a bank account, and the order was valid.

Judges:

Mackay J

Citations:

Times 02-Nov-2005, [2005] EWHC 2233 (QB), [2005] 4 All ER 899

Links:

Bailii

Citing:

See Also – Huntingdon Life Sciences Group Plc Huntingdon Life Sciences Limited, Brian Cass (for and on Behalf of the Employees of the First Claimant Pursuant To Cpr Part 19.6) v Stop Huntingdon Animal Cruelty QBD 28-May-2004
The claimant companies conducted forms of medical research to which the respondents objected, and showed their objections by a wide variety of acts and threats which the claimants sought to have stopped. The defendants sought discharge of an interim . .
Lists of cited by and citing cases may be incomplete.

Company, Costs

Updated: 04 July 2022; Ref: scu.235121

Home Insurance Company, Re: ChD 10 Nov 2005

The parties sought approval of scheme of arrangement of the American company at issue, a company conducting mainly re-insurances. Detailed proposals were put to the court as to the recovery of sums due to the company and payment out to the claimants or appropriate sums by way of compromise. Some creditors opposed the proposal. A request was made that any approval be delayed pending the outcome of a related application to be heard in the US.
Held: The application was partisan, and there was nothing in their case against the sanctioning of the scheme, given that assurances were made that the US proceedings would not be prejudiced.

Judges:

Mann J

Citations:

[2005] EWHC 2485 (Ch)

Links:

Bailii

Statutes:

Companies Act 1985 425

Jurisdiction:

England and Wales

Citing:

Cited – In re British Aviation Insurance Company Ltd ChD 21-Jul-2005
Complaint was made that the turn-out at the meeting to approve the proposed scheme of arrangement was about 15% representing just over half in value of the total claims, judged in each case by reference to ‘actual or pending’ claims. Counsel for the . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 04 July 2022; Ref: scu.234715

Gill v Sandhu (No. 2): CA 2 Nov 2005

The court considered the valuation of asets on the dissolution of a partnership at will.
Held: The appeal was allowed. The proper share of a partner in the assets was his proportion ascertained from the partnership assets after they had all been realised and converted into money.
Black J said: ‘the correct interpretation of section 42(1) is that which reflects the reality of the outgoing partner’s position vis-a-vis the partnership and not the interpretation adopted in the courts below. I am quite satisfied that the phrase ‘share of the partnership assets’ has the same meaning on both occasions when it is used in the section. In my judgment, the section contemplates that a figure will be ascertained, as at the date of dissolution, for the assets after payment of third party liabilities in accordance with section 44(b)1 and thereafter a calculation carried out as to what is due to the outgoing partner by way of advances, capital and share in any surplus. For the 5% interest option in section 42, no further calculation is necessary (except possibly in relation to a management allowance); the outgoing partner can claim 5% per annum on the figure calculated to be due to him. For the profit option, it will be necessary to work out the proportion that that figure bears to the total of the assets after discharge of third party liabilities; subject to arguments as to other factors that have contributed to the making of profit, the outgoing partner can claim the proportion of profit that his figure bears to the total assets. I have referred in this judgment to the accounting exercise as set out in section 44. As that section makes clear, however, contrary agreement will displace its provisions.’

Judges:

Mummery, Neuberger LJJ, Black J

Citations:

Times 08-Nov-2005, [2005] EWCA Civ 1297, [2006] 2 WLR 8, [2006] Ch 456

Links:

Bailii

Statutes:

Partnership Act 1890 42(1)

Jurisdiction:

England and Wales

Citing:

Appeal from – Hardip Singh Gill v Kulbir Singh Sandhu ChD 26-Jan-2005
The partnership had been dissolved. It had involved conversion of a property to be run as a nursing home. The claimant was to manage the home, and the profits would be used first to pay him a salary, and then to be divided equally. When wound up . .

Cited by:

Cited – Hopton v Miller ChD 31-Aug-2010
The parties had entered into partnership to open and run a restaurant, but without a formal agreement. They differed as to the values contributed by their respective efforts. After failures to disclose materials requested, the defendant we precluded . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 04 July 2022; Ref: scu.231661

In re Griffin Hotel Co Ltd: ChD 1941

A company owned hotels, in Leeds and in Buxton. In 1937, it issued a debenture creating a floating charge over all its assets to secure andpound;45,000. In December 1938, an order was made in a debenture holder’s action, appointing a receiver over all the company’s property except the Buxton Hotel which was subject to a prior mortgage and of no value to the debenture holder. The company continued to operate the Buxton Hotel. In March 1939, an order was made for the winding up of the company. In the meantime, in operating the Buxton Hotel, the company incurred certain preferential debts within the meaning of s. 264 of the 1929 Act. One issues was whether those preferential debts were payable in priority to the plaintiff (the debenture holder) from the proceeds of the assets over which the receiver was appointed in 1938. There were no other assets out of which the preferential debts could be discharged. The first issue related to the relationship between sections 78 and 264(4)(b) which is not of relevance. The second issue is the same construction issue arising in these proceedings, albeit in relation to s. 264(4)(b), providing: ‘The foregoing [preferential] debts shall: (a) rank equally among themselves and be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions; and (b) in the case of a company registered in England, so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures under any floating charge created by the company, and be paid accordingly out of any property comprised in or subject to that charge.’
Held: The court construed the expression ‘floating charge’ in the statute to mean a charge which was still floating at the date of the winding up.
Bennett J, having expressed his conclusion that s. 78 of the 1929 Act did not exclude or prevent the operation of sub-section 4(b) of s. 264, continued: ‘But that conclusion on the construction and effect of the statutory provisions leaves open the question whether in the supposed events there is, when the winding up take place, any floating charge or any property subject to that charge. In my judgment, sub-s. 4(b) of s. 264 only operates if at the moment of the winding up there is still a floating charge created by the company and it only gives the preferential creditors a priority over the claims of the debenture holders in any property which at that moment of time is comprised in or subject to that charge.
In the present case, the debenture held by the plaintiffs contained a floating charge over all the borrowers’ property. On December 9, 1938, that charge ceased to float on the property and assets of which Mr. Veale was appointed receiver. The charge on that day crystallised and became fixed on that property and those assets. It remained a floating charge on any other assets of the borrowers. At the moment before the winding up order was made, the charge still floated over any other assets of the borrowers and over those other assets, if any, the preferential creditors as defined by sub-s. I of s. 264 have a priority over the claims of the plaintiffs by force of the provisions of sub-s.4 of the same section. This seems to be a corollary of the proposition established by In re Lewis Merthyr Consolidated Collieries, Ld. (I) [1929] 1 Ch. 498.’

Judges:

Bennett J

Citations:

[1941] Ch 129

Statutes:

Companies Act 1929 78 264

Jurisdiction:

England and Wales

Cited by:

Cited – Buchler and another (as joint liquidators of Leyland DAF Limited) v Talbot and another (as joint administrative receivers of Leyland DAF Limited) and Stichting Ofasec and others HL 4-Mar-2004
The liquidator sought to recover his expenses from assets charged under a floating charge in priority to the chargee.
Held: Barleycorn was decided in error. The liquidators costs incurred in an insolvent winding up were not to be charged . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 03 July 2022; Ref: scu.194251

Kynixa Ltd v Hynes and others: QBD 30 Jun 2008

Complaint of breaches of employment contracts and shareholders’ agreements.

Judges:

Wyn Williams J

Citations:

[2008] EWHC 1495 (QB)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Supplemental Judgment – Kynixa Ltd v Hynes and others QBD 15-Jul-2008
. .
Cited – Office Angels Ltd v Rainer-Thomas CA 1991
Reasonability Test of Post Employment Restriction
The court re-stated the principles applicable in testing whether an employee’s restrictive covenant was reasonable: ‘The court cannot say that a covenant in one form affords no more than adequate protection to a covenantee’s relevant legitimate . .
Cited – Brake Brothers Limited v Ungless QBD 2004
The court considered the law relating to post employment restrictive covenants. Gloster J said: ‘(1) Covenants in Restraint of Trade are prima-facie unlawful and accordingly are ‘to be treated with suspicion’ see per Laddie J in Countrywide Assured . .

Cited by:

Main Judgment – Kynixa Ltd v Hynes and others QBD 15-Jul-2008
. .
Lists of cited by and citing cases may be incomplete.

Employment, Company

Updated: 01 July 2022; Ref: scu.270818

Gharibian-Saki v Trant: QBD 12 Mar 2008

Shares in the company were held in the ration 60% and 40%. The company assets were sold, and the proceeds distributed accordingly. The claimant now sought a declaration that the excess shares led by the defendant were held in trust for the claimant.

Citations:

[2008] EWHC 492 (QB)

Links:

Bailii

Jurisdiction:

England and Wales

Company

Updated: 01 July 2022; Ref: scu.268687

Eastaway v Secretary of State for Trade and Industry and similar: ChD 2 Mar 2006

Judges:

Lightman J

Citations:

[2006] EWHC 299 (Ch)

Links:

Bailii

Statutes:

Company Directors Disqualification Act 1986

Jurisdiction:

England and Wales

Citing:

See Also – Regina v Secretary of State for Trade and Industry, Ex Parte Eastaway HL 8-Nov-2000
Where the Court of Appeal had refused permission to apply for judicial review after a similar refusal by a judge, that decision was also, by implication, a refusal to grant permission to appeal against the judge’s decision, and there was no scope . .
See Also – Secretary of State for Trade and Industry v Eastaway CA 6-Apr-2001
. .
See Also – In Re Blackspur Group Plc; Secretary of State v Eastaway ChD 21-Jun-2001
The director was amongst a group against whom a director disqualification order was sought. He offered an undertaking, but the Secretary of State refused to accept this unless it was accompanied by a statement as to the factual basis on which it was . .
See Also – Secretary of State for Trade and Industry v Eastaway; Re Blackspur Group (No 3), Secretary of State for Trade and Industry v Davies and Others (No 2) CA 13-Sep-2001
. .
At ECHR – Eastaway v The United Kingdom ECHR 20-Jul-2004
The applicant had been proceeded against after the collapse of companies in which he was involved with very substantial debts. The proceedings had begun in July 1990, and lasted nearly nine years.
Held: Where proceedings could be expected to . .

Cited by:

Appeal from – Eastaway v Secretary of State for Trade and Industry CA 10-May-2007
The applicant had been subject to company director disqualification proceedings. Eventually he gave an undertaking not to act as a company director, but then succeeded at the ECHR in a complaint of delay. He now sought release from his undertaking . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 July 2022; Ref: scu.238792

Hale v Waldock: re Metropolis Motorcycles Ltd: ChD 6 Mar 2006

Complaint of unfairly prejudicial conduct of management of a company.

Judges:

Mann J

Citations:

[2006] EWHC 364 (Ch), [2007] 1 BCLC 520

Links:

Bailii

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Cited by:

Cited – Kohli v Lit and Others ChD 13-Nov-2009
The claimant asserted that the other shareholders had acted in a manner unfairly prejudicial to her within the company.
Held: The claimant was allowed to bring in without prejudice correspondence to contradict evidence by the defendant which . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 July 2022; Ref: scu.238891

Irvine and others v Irvine and Another: ChD 23 Mar 2006

The court had made an order for the purchase of a minority shareholding after finding prejudicial behaviour by the majority. It now considered valuation of the shares in a 49.96% shareholding. The question was whether the valuation should be discounted to reflect the fact that they were part of a minority shareholding.
Held: It was proper to apply a discount: ‘A minority shareholding, even one where the extent of the minority is as slight as in this case, is to be valued for what it is, a minority shareholding, unless there is some good reason to attribute to it a pro-rata share of the overall value of the company. Short of a quasi-partnership or some other exceptional circumstance, there is no reason to accord to it a quality which it lacks. ‘

Judges:

Blackburne J

Citations:

[2006] EWHC 583 (Ch), Times 21-Apr-2006

Links:

Bailii

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Citing:

Cited – In re Bird Precision Bellows Ltd ChD 1984
The court considered the method of valuation of a minority shareholding in a forced purchase by the other shareholders. Nourse J said: ‘I would expect that in a majority of cases where purchase orders are made under section 75 in relation to . .
Cited – Strahan v Wilcock CA 19-Jan-2006
The court considered the valuation of minority shares in an order for their purchase: ‘Shares are generally ordered to be purchased on the basis of their valuation on a non-discounted basis where the party against whom the order is made has acted in . .
Cited – CVC/Opportunity Equity Partners Limited and Opportunity Invest II Limited v Luis Roberto Demarco Almeida PC 21-Mar-2002
(Cayman Islands) The respondent was a minority shareholder. An offer was made to buy out his interest. He petitioned for the winding up of the company on the just and equitable ground. The claimants obtained an injunction to prevent him doing so, . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 July 2022; Ref: scu.239281

The Secretary of State for Trade and Industry v Jonkler and Another: ChD 10 Feb 2006

The applicant had given an undertaking to the court to secure discontinuance of company director disqualification procedings. He now sought a variation of the undertaking.
Held: The claimant had given an undertaking, but in the light of new evidence proceedings against her her co-directors had been discontinued. A variation should be allowed only where some circumstance arose which was not known to the parties at the time of the undertaking. The court must distinguish between the extent of its power to allow a variation, and the conditions under which a variation should be allowed.

Judges:

Hart J

Citations:

[2006] EWHC 135 (Ch), Times 03-Mar-2006

Links:

Bailii

Statutes:

Company Directors Disqualificatin Act 1985

Jurisdiction:

England and Wales

Citing:

Cited – Secretary of State for Trade and Industry v Eastaway; Re Blackspur Group (No 3), Secretary of State for Trade and Industry v Davies and Others (No 2) CA 13-Sep-2001
. .
Cited – In Re Carecraft Construction Co Ltd ChD 13-Oct-1993
A court must hear evidence before disqualifying directors. Though the Director and the Secretary of State might reach an agreement as to what should happen, they could not displace the court in deciding what order should be made, and in making that . .
Cited – Secretary of State for Trade and Industry v Rogers 1996
If fraud is to be alleged against a company director in disqualification proceedings, the allegation must be distinctly alleged and as distinctly proved. . .
Cited – Pepper (Inspector of Taxes) v Hart HL 26-Nov-1992
Reference to Parliamentary Papers behind Statute
The inspector sought to tax the benefits in kind received by teachers at a private school in having their children educated at the school for free. Having agreed this was a taxable emolument, it was argued as to whether the taxable benefit was the . .
Cited – Di Placito v Slater and others CA 19-Dec-2003
The parties had earlier compromised their dispute, with the claimant undertaking not to lodge any further claim unless he did so within a certain time. They now sought to commence action.
Held: When considering whether to discharge such an . .
Cited – Patrick Queen v Secretary of State for Trade and Industry SCS 6-Dec-2001
. .
Cited – Secretary of State for Trade and Industry v Collins and others CA 13-Jan-2000
A disqualified director applied for consent to act in the management of a company before his disqualification had expired. He succeeded, and the judge made no award for costs. On appeal by the Secretary of State it was held that the lifting of the . .
Cited – Mond and Another v Hammond Suddards and Another CA 15-Jun-1999
The court does not have power to order the payment of a liquidator’s costs which had not been properly incurred. The costs of unsuccessful litigation were not recoverable in priority to a secured creditor in priority to the charge. As to rule . .
Cited – Purcell v F C Trigell Ltd CA 1971
The court will not interfere with an existing consent order, save in circumstances in which it could interfere with a contract as a matter of substantive law. A consent order derives its authority from the contract made between the parties. . .
Cited – Eronat v Tabbah CA 10-Jul-2002
. .
Cited – S v S (Ancillary Relief: Consent Order) FD 4-Mar-2002
An order for ancillary relief had been made by consent. Later the House of Lords issued a judgment which changed the law which had been the basis of the decision to accept the settlement. The wife now sought to set aside the consent order, and . .
Cited – Chanel Ltd v F W Woolworth and Co CA 1981
On an interlocutory application by the claimant for relief in respect of alleged infringement of trademark and passing off the defendant gave undertakings until judgment or further order. Shortly thereafter the Court of Appeal in another case upheld . .
Cited – Eronat v Tabbah CA 10-Jul-2002
. .
Cited – Ropac Ltd v Inntrepreneur Pub Co and Another ChD 7-Jun-2000
There had been a consent order in the terms of an unless order giving the landlord an order for possession unless the tenant paid sums by a certain date, time being of the essence. The order was not complied with and the tenant applied for a . .
Cited – In re a Debtor (No 32 SD 1991) ChD 1993
. .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 01 July 2022; Ref: scu.238403

Gencor ACP Ltd v Dalby: ChD 2000

The plaintiff made a large number of claims against a former director, Mr Dalby, for misappropriating its funds. These included a claim for an account of a secret profit which Mr Dalby was said to have been procured to be paid by a third party, Balfour Beatty, to a BVI company under his control called Burnstead.
Held: Mr Dalby was accountable for the money received by Burnstead.
‘Burnstead was an offshore company which was wholly owned and controlled by Mr Dalby and in which nobody else had any beneficial interest. Everything it did was done on his directions and on his directions alone. It had no sales force, technical team or other employees capable of carrying on any business. Its only function was to make and receive payments. It was in substance little other than Mr Dalby’s offshore bank account held in a nominee name. In my view this is the type of case in which the court ought to have no hesitation in regarding Burnstead simply as the alter ego through which Mr Dalby enjoyed the profit which he earned in breach of his fiduciary duty to ACP. If the arrival at this result requires a lifting of Burnstead’s corporate veil, then I regard this as an appropriate case in which to do so. Burnstead is simply a creature company used for receiving profits for which equity holds Mr Dalby to be accountable to ACP. Its knowledge was in all respects the same as his knowledge. The introduction into the story of such a creature company is, in my view, insufficient to prevent equity’s eye from identifying it with Mr Dalby’

Judges:

Rimer J

Citations:

[2000] 2 BCLC 734, [2000] EWHC 1560 (Ch), [2000] 2 BCLC 734

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Doubted – Prest v Petrodel Resources Ltd and Others SC 12-Jun-2013
In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. The . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .
Lists of cited by and citing cases may be incomplete.

Company, Trusts, Torts – Other

Updated: 01 July 2022; Ref: scu.230346

Runciman v Walter Runciman plc: 1992

Simon Brown J said: ‘Whatever may have been the strict legal requirements of the position, on the particular facts of this case I am perfectly satisfied that for the plaintiff to have made a specific declaration of interest before agreement of the variations here in question would have served no conceivable purpose. It would have been mere incantation.’

Judges:

Simon Brown J

Citations:

[1992] BCLC 1084

Statutes:

Companies Act 1985 727

Jurisdiction:

England and Wales

Cited by:

Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 July 2022; Ref: scu.230303

Re Dominion International Group (No. 2): 1996

Knox J said: ‘On the other hand it has been held that where the directors are all in fact sufficiently aware of the matter that should be formally disclosed, the absence of formal disclosure may not amount to more than a technical non-declaration of an interest.’

Judges:

Knox J

Citations:

[1996] 1 BCLC 572

Statutes:

Companies Act 1985 727

Jurisdiction:

England and Wales

Cited by:

Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 July 2022; Ref: scu.230304

Lee Panavision Ltd v Lee Lighting Ltd: CA 1992

The court considered an allegation of a failure to declare an interest to a company board meeting, met by a defence that the undeclared interest was common to and known by each of the directors.
Held: Dillon LJ said: ‘if the judge was entitled to make findings of non-disclosure and non-declaration of interests that he did, the position is that each of the directors has failed to disclose formally at the board meeting an interest common to all the directors and, ex hypothesi, already known to all the directors. I would hesitate to hold that such apparently technical non-declaration of an interest in breach of s 317 has the inevitable result, as to which the court has no discretion, that the second management agreement is fundamentally flawed and must be set aside if Lee Lighting chooses to ask sufficiently promptly that it be set aside.’

Judges:

Dillon, Stocker LJJ, Sir David Croom-Johnson

Citations:

[1992] BCLC 22

Statutes:

Companies Act 1985 317 727

Jurisdiction:

England and Wales

Cited by:

Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 July 2022; Ref: scu.230302

Imperial Mercantile Credit Association v Coleman: HL 1873

Where a company director puts the benefit of a company contract into a partnership, he is fully accountable even if his partners are entitled to part of the profit and are ignorant of his breach of fiduciary duty.

Citations:

(1873) LR 6 HL 189

Jurisdiction:

England and Wales

Cited by:

Cited – CMS Dolphin Ltd v Paul M Simonet and Another ChD 23-May-2001
The claimant asserted that the defendant had, having at one point been a creative director of the claimant, left to set up an alternate competing business, and diverted business from the first company to the new one. There had been disagreements . .
Lists of cited by and citing cases may be incomplete.

Company, Trusts

Updated: 01 July 2022; Ref: scu.230347

In re British Aviation Insurance Company Ltd: ChD 21 Jul 2005

Complaint was made that the turn-out at the meeting to approve the proposed scheme of arrangement was about 15% representing just over half in value of the total claims, judged in each case by reference to ‘actual or pending’ claims. Counsel for the company pointed out that the relatively low number was not unusual by the standards of schemes of arrangement.
Held: Lewison J said that the turn-out was not in itself a valid reason for refusing to endorse the majority view.

Judges:

Lewison J

Citations:

[2005] EWHC 1621 (Ch), [2006] BCC 14

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Home Insurance Company, Re ChD 10-Nov-2005
The parties sought approval of scheme of arrangement of the American company at issue, a company conducting mainly re-insurances. Detailed proposals were put to the court as to the recovery of sums due to the company and payment out to the claimants . .
Cited – Cape Plc and Others, Re Companies Act 1985 ChD 16-Jun-2006
The court was asked to sanction a scheme of arrangements, and particularly to approve a proposed scheme which itself contained the power to make amendments to the scheme.
Held: The court did have power to sanction such a proposed scheme of . .
Lists of cited by and citing cases may be incomplete.

Insurance, Company, Insolvency

Updated: 01 July 2022; Ref: scu.228951

Wilkinson v West Coast Capital and others: ChD 22 Jul 2005

A claim was to be made about actions of unfair prejudice by the directors against the minor shareholder. The court considered a preliminary issue as to the admissibility of evidence, including without prejudice correspondence.
Held: The applicant sought to dissect the negotiations to identify what was admissible. That was not acceptable as regards without prejudice correspondence: ‘part of the purpose is to enable parties to conduct themselves freely in negotiations, it is important that things going beyond technical admissions should be caught by the bars imposed by the without prejudice principles. In my view, that will extend to who it was who broke off negotiations and who decided not to go through with an apparently agreed deal (albeit subject to contract). That seems to me to be all part of the freedom of negotiation under the umbrella. ‘

Judges:

Mann J

Citations:

[2005] EWHC 1606 (Ch)

Links:

Bailii

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Citing:

Cited – Vernon v Bosley (1) QBD 1993
The court discussed the extent to which a judge had control over the admission of otherwise admissible evidence: ‘A point comes at which literal admissibility has to yield to the constraints of proportionality . . such proportionality may in any one . .
Cited – Vernon v Bosley (1) CA 8-Apr-1994
Though the judge had a right to exclude admissible evidence, it remained a balancing exercise which came down to being a matter of his discretion. Evidence might not be admitted which would involve ‘inconvenience, expense, delay or oppression’. The . .
Cited – Re Unisoft Group Limited (No 3) ChD 1994
When considering applications to strike out parts of pleadings in a s459 application, the courts had to recognise the need to be careful not to allow the parties to trawl through irrelevant grievances. B The statutory definition of ‘shadow director’ . .
Cited – Prudential Assurance Co Ltd v Prudential Insurance Co of America ChD 20-Dec-2002
The parties had undertaken negotiations on a ‘without prejudice’ basis. One now sought freedom to rely upon the other’s statements.
Held: There was a need to balance the right to freedom of expression, against the need to protect the rights of . .
Cited – Unilever plc v Procter and Gamble Company CA 4-Nov-1999
The defendant’s negotiators had asserted in an expressly ‘without prejudice’ meeting, that the plaintiff was infringing its patent and they threatened to bring an action for infringement. The plaintiff sought to bring a threat action under section . .

Cited by:

See Also – Wilkinson v West Coast Capital and others ChD 21-Dec-2005
. .
Lists of cited by and citing cases may be incomplete.

Company, Evidence

Updated: 01 July 2022; Ref: scu.228968