Almer Beheer And Daedalus Holding v Van den Dungen Vastgoed BV and Oosterhout II BVBA: ECJ 19 Jun 2014

ECJ (Advocate General’s Opinion) Company law – Directive 2003/71/EC – Obligation to publish a prospectus when securities are offered for sale to the public – Scope of application – Court-enforced sale and transfer of securities – Total consideration of the offer

Sharpston AG
C-441/12, [2014] EUECJ C-441/12 – O, [2014] EUECJ C-441/12
Bailii, Bailii
European

Company

Updated: 05 December 2021; Ref: scu.527230

Hamilton and others v Allied Domecq Plc (Scotland): HL 11 Jul 2007

The pursuers had been shareholders in a company which sold spring water. The defenders took shares in the company in return for promises as to the promotion and distribution of the bottled water. The pursuers said that they had failed to promote it in the way promised. The company failed. At first instance the judge found for the pursuers, but the defenders succeeded on reclamation.
Held: The pursuers had not done enough to show the misrepresentation alleged, and the claim failed. A critical finding of fact had been made which was unsupported by the evidence.

Lord Hoffmann, Lord Scott of Foscote, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe, Lord Neuberger of Abbotsbury
[2007] UKHL 33, 2007 SC (HL) 142
Bailii
Scotland
Citing:
Appeal FromJohn Stewart Hamilton and others v Allied Domecq Plc OHCS 1-Aug-2003
. .
CitedPeek v Gurney HL 31-Jul-1873
A prospectus for an intended company was issued by promoters who were aware of the disastrous liabilities of the business of Overend and Gurney which the company was to purchase. The prospectus made no mention of a deed of arrangement under which . .
CitedBanque Keyser Ullmann SA v Skandia (UK) Insurance Co Ltd CA 1990
A loan was to be made. An agent of the borrower came to know of the fraudulent nature of the loan, but said nothing.
Held: A failure to disclose a known fraud may itself amount to a misrepresentation, but nondisclosure (whether dishonest or . .
CitedPayabi and Another v Armstel Shipping Corporation and Another QBD 1-Apr-1992
A party had been wrongly added in breach of limitation under Hague Convention. There should have been no relation back. Hobhouse J considered the effect of the 1980 Act: ‘But it is clear that Ord. 20, r. 5 must now be read with the [1980] Act and is . .
CitedAdelson and Another v Associated Newspapers Ltd CA 9-Jul-2007
The claimant sought to add the name of a further claimant. The defendant objected, saying that it was after the expiry of the limitation period.
Held: The claimant was seeking to use the rules for substitution of parties to add a party. In . .
CitedWatt (or Thomas) v Thomas HL 1947
When Scots Appellate Court may set decision aside
The House considered when it was appropriate for an appellate court in Scotland to set aside the judgment at first instance.
Lord Thankerton said: ‘(1) Where a question of fact has been tried by a judge without a jury, and there is no question . .

Cited by:
CitedMcGraddie v McGraddie and Another (Scotland) SC 31-Jul-2013
The parties were father and son, living at first in the US. On the son’s wife becoming seriously ill, the son returned to Scotland. The father advanced a substantal sum for the purchase of a property to live in, but the son put the properties in his . .

Lists of cited by and citing cases may be incomplete.

Company, Torts – Other, Litigation Practice

Updated: 05 December 2021; Ref: scu.254549

MT Realisations Limited (In Liquidation) v Digital Equipment Co Limited: CA 10 Apr 2003

The company was insolvent, depending upon loans to it from its parent company. In the liquidation, it was claimed that in a scheme for the acquisition of the shares, the assumption of liability to repay a loan amounted to unlawful financial assistance in the acquisition of its shares. The claimant company appealed a striking out if its claims on the basis that the agreement pay andpound;6.5m under the assignment was not a liability incurred ‘for the purpose of’ the acquisition of MTR’s shares.
Held: The Chaston case could properly be distinguished. Any financial assistance which might have taken place, took place after the relevant date.

Lord Justice Mummery Lord Justice May The President
[2003] EWCA Civ 494, [2003] 2 BCLC 117, [2003] BCC 415
Bailii
Companies Act 1985 151 152
England and Wales
Citing:
CitedRe VGM Holdings Limited CA 1942
In response to notorious scandals and great dissatisfaction caused by the speculative activities of asset strippers after the First World War, Parliament had decided to criminalise the giving of financial assistance by a company for the purpose of . .
DistinguishedChaston v SWP Group plc CA 2002
The court considered the legislative history of attempts to prevent asset stripping. A liability to pay money was incurred by a company (and payment was in fact made by the company) in order to facilitate the purchase of shares in it.
Held: . .
CitedCharterhouse 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 . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 05 December 2021; Ref: scu.180707

Peek v Gurney: HL 31 Jul 1873

A prospectus for an intended company was issued by promoters who were aware of the disastrous liabilities of the business of Overend and Gurney which the company was to purchase. The prospectus made no mention of a deed of arrangement under which those liabilities were, in effect, to be transferred to the company. The appellant bought shares in the company and, when it was wound up, he was declared liable as a contributory and had to pay almost pounds 100,000. He sought an indemnity against the directors, alleging misrepresentation and concealment of facts by the directors in the prospectus.
Held: The action failed because he had not in fact relied on the prospectus but had purchased the shares in the market.
Lord Cairns expressed his agreement with the observations of Lord Chelmsford and Lord Colonsay that mere silence could not be a sufficient foundation for the proceedings: ‘Mere non-disclosure of material facts, however morally censurable, however that non-disclosure might be a ground in a proper proceeding at a proper time for setting aside an allotment or a purchase of share, would in my opinion form no ground for an action in the nature of an action for misrepresentation. There must, in my opinion, be some active misstatement of fact, or, at all events, such a partial and fragmentary statement of fact, as that the withholding of that which is not stated makes that which is stated absolutely false.’

Lord Cairns
(1873) LR 6 HL 377, [1873] UKLawRpHL 19
Commonlii
England and Wales
Cited by:
CitedHamilton and others v Allied Domecq Plc (Scotland) HL 11-Jul-2007
The pursuers had been shareholders in a company which sold spring water. The defenders took shares in the company in return for promises as to the promotion and distribution of the bottled water. The pursuers said that they had failed to promote it . .
CitedCheltenham Borough Council v Laird QBD 15-Jun-2009
The council sought damages saying that their former chief executive had not disclosed her history of depressive illness when applying for her job.
Held: The replies were not dishonest as the form could have been misconstrued. The claim failed. . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 05 December 2021; Ref: scu.254561

(Unnamed) Service On Overseas Company: CA 24 Mar 1993

Service on an overseas company must accord with RSC 10(1)(7) and 65(3)(1) and Companies Act 1985 s695. Where an overseas company had an office in the UK, the writ had to be served within the UK, but not on the company at its offices, but rather on the person nominated to the registrar of companies to receive such service.

Gazette 24-Mar-1993
Companies Act 1985 695
England and Wales

Litigation Practice, Company

Updated: 04 December 2021; Ref: scu.77562

Commission of The European Communities v Grand Duchy Of Luxemburg: ECJ 9 Oct 2008

ECJ (Judgment Of The Court (Sixth Chamber)) Failure of a Member State to fulfil obligations – Directive 2003/72/EC – Statute for a European Cooperative Society – Involvement of employees in the decision-making of the society – Failure to transpose within the prescribed period

C-70/08, [2008] EUECJ C-70/08, [2008] EUECJ C-70/08
Bailii, Bailii
Directive 2003/72/EC

European, Company

Updated: 04 December 2021; Ref: scu.526326

The Registrar of Companies v Swarbrick and Others (Administrators of Gardenprime Ltd): ChD 13 May 2014

The registrar challenged an order regarding the administration of a company by the respondents, after a dispute had arisen as to whether dissemination of the contents of the Proposals by making them publicly accessible placed the Company in breach of a contractual obligation to keep confidential certain information

Richard Spearman QC
[2014] EWHC 1466 (Ch), [2014] WLR(D) 203
Bailii
England and Wales

Company

Updated: 03 December 2021; Ref: scu.525500

Hurndell v Hozier and Another: CA 12 Feb 2009

A company sought a public listing, but too many shares were held in private hands. Shares were to be transferred by the claimant, but he now denied having signed any transfer. He now appealed against rejection of his claim saying that the judge had delayed substantially in his judgment and that the judgment contained several errors.

[2009] EWCA Civ 67
Bailii
England and Wales
Citing:
Appeal fromHurndell v Hozier and Another ChD 19-Mar-2008
. .

Cited by:
See AlsoHurndell v Hurndell and Others ChD 17-Dec-2010
. .
See AlsoHurndell v Hozier and Others ChD 18-Feb-2011
. .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 03 December 2021; Ref: scu.282615

McTear and Another v Engelhard and Others: ChD 10 Apr 2014

The court heard a dispute as to inter-company transactions between two companies in a group of companies, all owned and controlled by members of the same family. The Claimants contended that the transactions gave rise to a debt owed by the holding company to one of the subsidiaries, and to claims against the directors of the subsidiary for breaches of the duties that they owed to the subsidiary (and to its creditors). The Defendants contended the contrary, and that the Claimants were estopped from bringing these claims in any event.

Richard Spearman QC
[2014] EWHC 1056 (Ch)
Bailii

Company, Estoppel

Updated: 02 December 2021; Ref: scu.523661

Bucci v Carman (Liquidator of Casa Estates (UK) Limited): CA 3 Apr 2014

The court was asked: ‘when is a company deemed to be unable to pay its debts, with the result that it is insolvent? The procedural issue is whether the intermediate appeal court was entitled to substitute its own evaluation of the facts upon which the answer to the legal question depends. ‘

Sullivan, McFarlane, Lewison LJJ
[2014] EWCA Civ 383
Bailii
England and Wales

Company, Insolvency

Updated: 02 December 2021; Ref: scu.523440

Thevarajah and Another v Riordan and Others: ChD 21 Mar 2014

The parties disputed the arrangements for the intended acquisition by the Claimant of three properties, or more accurately of all or part of the shares in their owning companies. Following a failure to comply with ‘unless’ orders fr disclsure of documents, some defendants had been debarred firm defending the claims as to liability.
Held: ‘Absence of a Defence, by default or because it has been struck out in its entirety, must equally give rise to a deemed admission of all alleged elements constituent of a cause of action. But the admissions are necessarily circumscribed by what is alleged in the Particulars of Claim. When the court comes to give judgment on the claimant’s application it is therefore on that, and that alone, that it is entitled to found.’ Orders were made for he transfers of shares accordingly.

David Donaldson QC
[2014] EWHC 725 (Ch)
Bailii
England and Wales
Citing:
See AlsoThevarajah v Riordan and Others ChD 10-Oct-2013
The court allowed the application of the first, second and fourth respondents for relief from sanction under CPR 3.9. . .
See AlsoThevarajah v Riordan and Others ChD 9-Aug-2013
The court was asked first whether the defendants had complied with an unless order made with respect to the disclosure of information required to be provided in aid and in order to ensure the proper release of a freezing order which had previously . .
See AlsoThevarajah v Riordan and Others CA 16-Jan-2014
Defendants appealed against an order allowing the application of the first, second and fourth respondents for relief from sanction under CPR 3.9. The relief sought had previously been refused by Hildyard J, so this was the respondents’ second . .

Cited by:
Appal fromThevarajah v Riordan and Others CA 4-Feb-2015
The court was asked whether the judge at first instance had been right to attribute an agreement which he had not made to the defendants.
Held: The defendants were liable to pay 2.205 million pounds. . .
1st Instance judgmentThevarajah v Riordan and Others SC 16-Dec-2015
The defendants had failed to comply with an ‘unless’ order requiring disclosure, and had been first debarred from defending the cases as to liability. They applied to a second judge who granted relief from sanctions after new solicitors had complied . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 December 2021; Ref: scu.522666

Speechley and Others v Allott and Others: CA 10 Mar 2014

The parties disputed the management of a social club. The club owned a bowling green, and bowling members sought to restrain its closure. The appellants now said that the court should not have found at first instance that a meeting had validly elected a new committee and officers despite defects in the procedures adopted. Payments had also been correct despite not being satisfactorily documented.
Held: A vote at a meeting required to be by ballot was not satisfied by a show of hands. Nor is this a failure of form rather than substance. Nor did the notice of meeting forewarn the members that the elections would not be by ballot. However the later AGM was effective to cure these issues. The request for an account was refused, the appellant being unable to identify documents he wanted over and above those received. The appeal succeeded to that limited extent.

Sullivan, McFarlane, Lewison LJJ
[2014] EWCA Civ 230
Bailii
Friendly Societies Act 1992 30, Friendly Societies Act 1974 76
England and Wales
Citing:
CitedRegina v Tidd Pratt 5-Jun-1865
The court was asked as to the purported alteration of the rules of a friendly society which the registrar had refused to register. The two alleged defects were: i) The meeting of the society was held in Manchester (where the majority of members . .
CitedLabouchere v Earl of Wharncliffe CA 1879
The purported expulsion of Mr Labouchere from the Beefsteak Club was invalid because the rules had not been followed. . .
CitedDawkins v Antrobus CA 1-Feb-1881
The Court will not interfere against the decision of the members of a club professing to act under their rules, unless it can be shewn either that the rules are contrary to natural justice, or that what has been done is contrary to the rules, or . .
CitedYoung v Ladies’ Imperial Club Ltd CA 1920
The purported expulsion of Mrs Young from the Ladies’ Imperial Club was invalid for two reasons. First, one member of the executive committee had not been given notice of the meeting, even though she would not have attended it. Second, the notice of . .
CitedRe Sick and Funeral Society of St John’s Sunday School Golcar ChD 1973
The rules of a club are essentially contractual iin nature. . .
CitedRe GKN Bolts and Nuts Ltd etc Works Sports and Social Club ChD 1982
There was a sports and social club associated with GKN, whose members were all employees of GKN. The main issue in the case was whether the club had ceased to exist. But one subsidiary issue was whether a meeting had been validly convened. The club . .
CitedNewbold and Others v The Coal Authority CA 23-May-2013
Appeal by the Coal Authority against an order declaring that notices of subsidence damage were valid damage notices for the purposes of section 3 of the 1991 Act.
Held: Sir Stanley Burnton said: ‘In all cases, one must first construe the . .
CitedBarron v Potter 1914
Where all the directors of a company agree to something which the articles require to be decided by resolution, then the unanimous agreement of all the members of the company is as good as a formal resolution passed by a majority. . .
CitedIn Re Duomatic Ltd ChD 1969
Payments were made by a company by way of remuneration to directors without complying with the company’s articles of association in that no resolution authorising the directors to receive remuneration had ever been passed in a general meeting of the . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 December 2021; Ref: scu.522279

Primus International Holding Company and Others v Triumph Controls – Uk Ltd and Another: CA 22 Sep 2020

The issue in this appeal is whether the claims brought by the claimants/respondents were claims ‘in respect of lost goodwill’ and therefore excluded by a clause in the relevant share purchase agreement. O’Farrell J concluded that the exclusion clause did not apply to the claims brought by Triumph. The defendants/appellants (‘Primus’) challenge that conclusion.

Coulson LJ
[2020] EWCA Civ 1228
Bailii
England and Wales

Contract, Company

Updated: 30 November 2021; Ref: scu.654038

Ellis v Joseph Ellis and Co: CA 1905

A member of a partnership formed to work a mine worked in it as foreman. He took weekly wages from the profits. He suffered a fatal accident in the mine and his widow sought compensation under the 1897 Act from the surviving partners. To qualify he had to have been a workman, which was defined broadly in the Act and extended beyond employees strictly defined: ”Workman’ includes every person who is engaged in an employment to which this Act applies, whether by way of manual labor or otherwise, and whether his agreement is one of service or apprenticeship or otherwise and is expressed or implied, is oral or in writing’. The Court was asked whether, given his position as a partner, he came within the definition. Could he be regarded as a workman in the employ of the partnership with the other partners being his employer?
Held: The action failed.
Lord Collins MR thought that he could not: ‘The supposition that the deceased man was ’employed’, within the meaning of that term as used in the Act, would appear to involve that he, as one of the partners, must be looked upon as occupying the position of being one of his own employers. It seems to me that, when one comes to analyse an arrangement of this kind, namely, one by which a partner himself works, and receives sums which are called wages, it really does not create the relation of employers and employed, but is, in truth, a mode of adjusting the amount that must be taken to have been contributed to the partnership assets by a partner who has made what is really a contribution in kind, and does not affect his relation to the other partners, which is that of co-adventurer and not employee. Such a partner cannot put himself in the position of not being a partner when he is one, or of being a workman employed, when that position would involve that he would be both employer and employee. The definition of a ‘workman’ given in the Act might cover a person in such a position, apart from the difficulty that arises from the consideration that he would be his own employer; but that is not conclusive, because the applicability of the Act appears to depend not merely on the question whether the injured man was a workman within the definition given by the Act, but also on the existence of the relation of employer and workman. Sect.1 sub-s.1 provides that, ‘if in any employment to which this Act applies personal injury by accident arising out of and in the course of the employment is caused to a workman, his employer shall, subject as hereinafter mentioned, be liable to pay compensation in accordance with the first schedule to this Act.’ That section appears to me clearly to contemplate a relation between two opposite parties, of whom one is employer and the other employee. It seems to me obvious, when the true position of the deceased is analysed, that he was not such a workman as is contemplated by the Act, and that a person cannot for the purposes of the Act occupy the position of being both employer and employee’.
Mathew LJ stated that it was legally impossible for the same person to occupy the position of being both master and servant, employer and employed.
Cozens-Hardy LJ held that ‘the Act only applies where there is on one side an employer, and on the other side a workman, who are different persons.’

Lord Collins MR, Cozens-Hardy, Mathew LJJ
[1905] 1 KB 324
Workmen’s Compensation Act 1897
England and Wales
Cited by:
CitedClyde 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 . .
CitedClyde and Co LLP and Another v van Winkelhof SC 21-May-2014
Solicitor Firm Member was a Protected Worker
The solicitor appellant had been a member of the firm, a limited liability partnership. She disclosed criminal misbehaviour by a partner in a branch in Africa. On dismissal she sought protection as a whistleblower. This was rejected, it being found . .

Lists of cited by and citing cases may be incomplete.

Employment, Company, Personal Injury

Updated: 30 November 2021; Ref: scu.465969

Roadchef (Employee Benefits Trustees) Ltd v Hill and Another: ChD 29 Jan 2014

Challenge to share transfer.

Proudman J
[2014] EWHC 109 (Ch)
Bailii
England and Wales
Cited by:
CitedEclairs Group Ltd and Glengary Overseas Ltd v JKX Oil and Gas Plc SC 2-Dec-2015
Company Director not Trustee but is Fiduciary
The Court was asked about an alleged ‘corporate raid’, an attempt to exploit a minority shareholding in a company to obtain effective management or voting control without paying what other shareholders would regard as a proper price.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Equity, Company

Updated: 29 November 2021; Ref: scu.520825

UBAF Ltd v European American Banking Corporation: CA 1984

The defendant invited the plaintiff to take part in a syndicated loan. The defendant’s assistant secretary signed a letter to the plaintiff making representations, now claimed to be fraudulent. The defendant succeeded at first instance arguing that the signature was not that of the bank, and that even if it was, the action would be statute barred.
Held: The court refused to strike out the claim. A company itself made a representation, if it produced a document which was signed by an authorised officer or agent acting within the scope of his actual authority. This applied to bind the defendant bank. The nature of a syndicated loan was a fiduciary arrangement, and the obligations on a lead bank were continuing for limitation purposes, time did not run, and the obligation was not time barred. The issue would be settled at trial when it was established when the defendant could be said to have come to know of the alleged deceit.

Ackner LJ
[1984] QB 713, [1984] 1 WLR 508, [1984] CLY 1579
England and Wales
Citing:
ExplainedSwift v Jewsbury and Goddard 1874
. .
ExplainedHirst v West Riding Banking Co CA 1901
The representation on which the claim made was was in a letter signed by the branch manager of the defendant bank and the court evidently assumed that this could not be equated with the bank’s own signature.
Held: The action against the bank . .
ConsideredForster v Outred and Co CA 1981
A mother signed a mortgage deed charging her property to H as security for a loan to her son. She claimed the solicitor had been negligent in his advice. The solicitor replied that the claim was out of time. The loss accrued not when demand for . .

Cited by:
CitedNykredit Mortgage Bank Plc v Edward Erdman Group Ltd (No 2) HL 27-Nov-1997
A surveyor’s negligent valuation had led to the plaintiff obtaining what turned out to be inadequate security for his loan. A cause of action against a valuer for his negligent valuation arises when a relevant and measurable loss is first recorded. . .
CitedPegasus Management Holdings Sca and Another v Ernst and Young (A Firm) and Another ChD 11-Nov-2008
The claimants alleged professional negligence in advice given by the defendant on a share purchase, saying that it should have been structured to reduce Capital Gains Tax. The defendants denied negligence and said the claim was statute barred.
Banking, Limitation, Torts – Other, Company

Updated: 29 November 2021; Ref: scu.181338

JC Houghton and Co v Northard, Lowe and Wills: HL 1927

The court was asked whether the knowledge of the directors of the latter company should be attributed to it, with the effect that the latter company could and should be treated as estopped from denying that it had consented to a particular arrangement with a third party company. However, the arrangement was one that was against the company’s interests and for the benefit of the third party company which the directors also controlled and which was in financial difficulties.
Held: The law does not make the unreal assumption that agents will reveal to their principals the fraud which they are comitting on them.
Viscount Dunedin summarily rejected the suggestion that the company could be treated as knowing about a director’s breach of duty by virtue only of the knowledge of the defaulting director himself: ‘My Lords, there can obviously be no acquiescence without knowledge of the fact as to which acquiescence is said to have taken place. The person who is sought to be estopped is here a company, an abstract conception, not a being who has eyes and ears. The knowledge of the company can only be the knowledge of persons who are entitled to represent the company. It may be assumed that the knowledge of directors is in ordinary circumstances the knowledge of the company. The knowledge of a mere official like the secretary would only be the knowledge of the company if the thing of which knowledge is predicated was a thing within the ordinary domain of the secretary’s duties. But what if the knowledge of the director is the knowledge of a director who is himself particeps criminis, that is, if the knowledge of an infringement of the right of the company is only brought home to the man who himself was the artificer of such infringement? Common sense suggests the answer, but authority is not wanting.’

Viscount Dunedin, Lord Sumner
[1928] AC 1, [1927] All ER 97
England and Wales
Citing:
CitedRe Hampshire Land Company 9-Jul-1896
A company had borrowed from a building society. The borrowing was not properly authorised by resolution of the shareholders in general meeting The court was asked whether whether the knowledge of the company secretary common to both the company and . .

Cited by:
CitedFassihim, Liddiardrams, International Ltd, Isograph Ltd v Item Software (UK) Ltd CA 30-Sep-2004
The first defendant (F) had been employed by a company involved in a distribution agreement. He had sought to set up a competing arrangement whilst a director of the claimant, and diverted a contract to his new company.
Held: A company . .
CitedJetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .

Lists of cited by and citing cases may be incomplete.

Agency, Company

Updated: 29 November 2021; Ref: scu.215866

Fassihim, Liddiardrams, International Ltd, Isograph Ltd v Item Software (UK) Ltd: CA 30 Sep 2004

The first defendant (F) had been employed by a company involved in a distribution agreement. He had sought to set up a competing arrangement whilst a director of the claimant, and diverted a contract to his new company.
Held: A company director has additional, fiduciary duties over and above those of an employee. The duties are set and imposed by law. Whilst a director was under a fiduciary duty to disclose his wrongdoing to the company, this was not a separate and independent duty but was part of the more general obligation to act in what he in good faith considers to be in the best interests of the company. F was under a duty to disclose that he had a personal interest in the decision before the board. That duty could only be fulfilled by informing the board of his setting up of an independent and competing company. The director was entitled to an apportioned part of his salary until the date of the breach. The 1870 Act should be treated as a remedial Act and there is no justification for striving to restrict its operation, and it does indeed extend to apportionment of salaries when the employment ceased during a pay period.

Mr Justice Holman, Lord Justice Mummery, Lady Justice Arden
[2004] EWCA Civ 1244, Times 21-Oct-2004, [2004] BCC 994, [2007] Lloyd’s Rep PN 17, [2005] ICR 450, [2005] 2 BCLC 91, [2004] IRLR 928
Bailii
Apportionment Act 1870, Companies Act 1985 310 317
England and Wales
Citing:
Appeal fromItem Software (UK) Ltd v Fassihi and Others ChD 5-Dec-2002
Enforcement of confidentiality clause in contract of employment on termination. . .
CitedBell v Lever Brothers Ltd HL 15-Dec-1931
Contract – Mutual Mistake Test
Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying pounds 30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could have . .
CitedRegal (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 . .
CitedHorcal Ltd v Gatland CA 1984
The court considered the arguments presented as to the duty of a director of a company to disclose his own breach of fiduciary duty: ‘Counsel . . submitted, as a general proposition, that, putting fraud on one side, there is no general duty on . .
CitedBoston Deep Sea Fishing and Ice Co v Ansell CA 1888
An employer having dismissed an employee (its managing director) later learnt of the employee’s fraud.
Held: The employer was allowed to rely upon that fraud to justify the dismissal. Where an agent is in wrongful repudiation of his contract . .
CitedSybron Corporation v Rochem CA 1983
There was an allegation that the employee had failed to disclose breaches of contract by fellow employees. This had taken place at a time when a decision was being taken as to the payment to be made to him under the terms of a pension scheme. The . .
CitedRe Hampshire Land Company 9-Jul-1896
A company had borrowed from a building society. The borrowing was not properly authorised by resolution of the shareholders in general meeting The court was asked whether whether the knowledge of the company secretary common to both the company and . .
CitedIndustrial Development Consultants Ltd v Cooley 1972
Mr Cooley was the managing director of the claimant. His duties included procuring business in the field of developing gas depots. The company had unsuccessful negotiations with the Eastern Gas Board for the development of four depots. However, the . .
CitedMoriarty v Regent’s Garage and Engineering Co Ltd KBD 1921
A company director sought payment of his directors fees of andpound;150 per annum where during the course of the year he had ceased to be a director. There was no allegation of impropriety on his part. The company’s articles provided that the . .
CitedJC Houghton and Co v Northard, Lowe and Wills HL 1927
The court was asked whether the knowledge of the directors of the latter company should be attributed to it, with the effect that the latter company could and should be treated as estopped from denying that it had consented to a particular . .
CitedCapron v Capron 1874
By a will made before the 1870 Act, but amended by a codicil after the Act commenced to the use of his wife with remainders over. After her death having inherited the property, the parties disputed the apportionment of the rents.
Held: The . .
CitedInman v Ackroyd 1901
In the absence of some custom as to the method of payment a Director’s salary would not be payable until the years service was completed, which necessarily would require that it be paid outside the period of the year in which it was earned . .
CitedBhullar and others v Bhullar and Another CA 31-Mar-2003
The claimants were 50% shareholders in a property investment company and sought relief alleging prejudicial conduct of the company’s affairs. After a falling out, two directors purchased property adjacent to a company property but in their own . .
CitedMiles v Wakefield Metropolitan District Council HL 1987
The claimant was a superintendent registrar of Births Deaths and Marriages. His union instructed him not to conduct weddings on Saturdays. He had been told that if he failed to perform his full range of duties on a Saturday (including marriages), he . .
CitedCrown Dilmun, Dilmun Investments Limited v Nicholas Sutton, Fulham River Projects Limited ChD 23-Jan-2004
There was a contract for the sale of Craven Cottage football stadium, conditional upon the grant of non-onerous planning permissions. It was claimed that the contract had been obtained by the defendant employee in breach of his fiduciary duties to . .
CitedTesco Stores Limited v Pook, Pook, Universal Projects (UK) Limited ChD 14-Apr-2003
A trustee in breach of his duty has a duty to disclose that breach. It was alleged that the defendants, including a director of the claimant, had submitted false invoices to the claimants, and purchased property with the resulting profits.
CitedSim v Rotherham Metropolitan Borough Council 1981
The 1870 Act applied where an employee’s contract was terminated in the course of a period at the end of which payment would be made. Scott J said: ‘Mr Goudie submitted that the real question was whether a teacher was entitled to be paid for the . .
CitedEl Ajou v Dollar Land Holdings Ltd CA 2-Dec-1993
The court was asked whether, for the purposes of establishing a company’s liability under the knowing receipt head of constructive trust, the knowledge of one of its directors can be treated as having been the knowledge of the company.
Held: . .
CitedHealey v Societe Anonyme Francais Rubastic 1917
A director of the company claimed arrears of salary for work done notwithstanding that he had been summarily dismissed for misconduct. There was no question of a claim for damages for breach of duty. . .
CitedWinkworth v Edward Baron Development Co Ltd HL 1986
A company director has duties to the company’s creditors as well as the shareholders. ‘Equity is not a computer. Equity operates on conscience . .’ . .
CitedMeinhard v Salmon 1928
(New York Court of Appeals) Cardozo J said: ‘Equity refuses to confine within the bounds of classified transactions its precept of a loyalty that is undivided and unselfish’ and ‘[a] constructive trust is, then, the remedial device through which . .
CitedMutual Life Insurance Co of New York v Rank Organisation Ltd 1985
The duty of loyalty of a director to his company is the ‘time-honoured’ rule. The directors are under a duty to act fairly as between different shareholders. This applies not just where there were different classes of shareholder but also where . .
CitedIn Re Barings Plc, Secretary of State for Trade and Industry v Baker (No 5) ChD 25-Nov-1998
A person disqualified from acting as a company director might exceptionally be given permission to act as non-executive director in named companies where this appeared necessary and the cause of the original disqualification was unrelated.
As . .
CitedPowdrill 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 . .
CitedMoriarty v Regent’s Garage and Engineering Co Ltd CA 2-Jan-1921
Whilst the point was obiter in this case: ‘ . . it seems to me that there is no decision binding on the Court of Appeal as to whether directors’ fees are salary within the Apportionment Act in the case where the agreement . . is simply for payment . .
CitedRe William Porter and Co Ltd 1937
. .
CitedTreacy v Corcoran 1874
(Irish Court of Common Pleas) The holder of a public office as Clerk of the Crown was entitled to be paid half yearly. During the course of a half year the plaintiff, Treacy, had resigned from that office. At the end of the half year the salary for . .

Cited by:
CitedFulham Football Club (1987) Ltd v Tigana CA 19-Jul-2005
The defendant had acted as manager of the claimant. The claimant appealed dismissal of its claim for breach of contract and of fiduciary duty, and his claim for payment of sums due under share options granted to him.
Held: The appeal failed. . .
CitedHelmet 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 . .
CitedHartley and Others v King Edward VI College SC 24-May-2017
The teacher appellants challenged the quantification of deductions from their salaries after engaging in lawful strike days.
Held: The appeal as allowed. The correct approach under section 2 to a case like this, where the contract is an annual . .

Lists of cited by and citing cases may be incomplete.

Company, Employment

Updated: 29 November 2021; Ref: scu.215858

Bell v Lever Brothers Ltd: HL 15 Dec 1931

Contract – Mutual Mistake Test

Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying pounds 30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could have been summarily dismissed. Lever sought repayment of the pounds 30,000 and claimed rescission of the agreement for fraud. The jury found that there was no fraud, but if Lever had known of the dealings giving rise to the secret profits, it would not have paid compensation. Before the trial, Bell admitted his liability to account to Niger for his secret profits, and made a payment into court.
Held: The court laid down the test for identifying a mutual mistake in contract allowing the contract to be declared void.
The mistake must render the subject matter of the contract essentially and radically different from the subject matter which the parties believed to exist. Was it the common assumption or pre-condition upon which the compromise agreement was made? The House asked whether there was a positive duty on the part of Bell and Snelling to disclose the breaches of contract they made. Lord Atkin concluded they had no such duty, saying of Healey: ‘It will be notice that Bell was not a director of Levers and with respect I cannot accept the view of Greer LJ that if he was in a fiduciary relationship with the Niger Company he was in a similar fiduciary relationship with the share holders’.
Lord Thankerton: ‘in the absence of fraud . . I am of the opinion that neither a servant nor a director of a company is legally bound forthwith to disclose any breach of the obligations arising out of the relationship so as to give the master or the company the opportunity of dismissal . . ‘ However, he also said, ‘there may well be case where the concealment of the misconduct amounts to a fraud on the master or company . . ‘
Lord Atkin considered the possible duty of disclosure of an intending partner: ‘Fraudulent concealment has been negatived by the jury; this claim is based upon the contention that Bell owed a duty to Levers to disclose his misconduct, and that in default of disclosure the contract was voidable. Ordinarily the failure to disclose a material fact which might influence the mind of a prudent contractor does not give the right to avoid the contract. The principle of caveat emptor applies outside contracts of sale. There are certain contracts expressed by the law to be contracts of the utmost good faith, where material facts must be disclosed; if not, the contract is voidable. Apart from special fiduciary relationships, contracts for partnership and contracts of insurance are the leading instances. In such cases the duty does not arise out of contract; the duty of a person proposing an insurance arises before a contract is made, so of an intending purchaser.’

Atkin L, Lord Thankerton, Lord Blanesburgh
[1932] AC 161, [1931] UKHL 2
Bailii
England and Wales
Citing:
Dictum approvedHealey v Societe Anonyme Francais Rubastic 1917
A director of the company claimed arrears of salary for work done notwithstanding that he had been summarily dismissed for misconduct. There was no question of a claim for damages for breach of duty. . .
Appeal fromBell v Lever Brothers Ltd CA 1931
The court was asked as to the duties of a company director: ‘It does not seem to me open to question that the directors of a company occupy a fiduciary position towards the company, with the result that they cannot retain a benefit they have . .
ApprovedLondon and Mashonaland Exploration Co Ltd v New Mashonaland Exploration Co Ltd 1891
There is nothing inherently objectionable in the position of a company director (and chairman) who, without breaching any express restrictive agreement or disclosing any confidential information, becomes engaged, whether personally or as a director . .

Cited by:
ConfirmedGreat Peace Shipping Ltd v Tsavliris (International) Ltd CA 14-Oct-2002
The parties contracted for the hire of a ship. They were each under a mistaken impression as to its position, and a penalty became payable. The hirer claimed that the equitable doctrine of mutual mistake should forgive him liability.
Held: . .
CitedWilliam Sindall Plc v Cambridgeshire County Council CA 21-May-1993
Land was bought for development, but the purchaser later discovered a sewage pipe which very substantially limited its development potential. The existence of the pipe had not been disclosed on the sale, being unknown to the seller.
Held: . .
CitedAssociated Japanese Bank (International) Ltd v Credit du Nord SA 1988
A contract of guarantee was made, but based upon a term of fundamental importance which was mistaken as to the existence of certain machines.
Held: The court must first look to the nature of the purported agreement. Steyn J said: ‘Logically, . .
DistinguishedHorcal Ltd v Gatland ChD 1983
Directors have a positive duty to disclose breaches of fiduciary duty. A failure by a director of a company, as opposed to an employee, to disclose an earlier breach of fiduciary duty would render an agreement terminating his contract of service (on . .
CitedHorcal Ltd v Gatland CA 1984
The court considered the arguments presented as to the duty of a director of a company to disclose his own breach of fiduciary duty: ‘Counsel . . submitted, as a general proposition, that, putting fraud on one side, there is no general duty on . .
CitedEIC Services Ltd European Internet Capital Ltd v Phipps, Paul, Barber CA 30-Jul-2004
Whether issue of additional shares had been properly authorised . .
CitedItem Software (UK) Ltd v Fassihi and Others ChD 5-Dec-2002
Enforcement of confidentiality clause in contract of employment on termination. . .
CitedFassihim, Liddiardrams, International Ltd, Isograph Ltd v Item Software (UK) Ltd CA 30-Sep-2004
The first defendant (F) had been employed by a company involved in a distribution agreement. He had sought to set up a competing arrangement whilst a director of the claimant, and diverted a contract to his new company.
Held: A company . .
MentionedUltraframe (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 . .
CitedHalpern and Another v Halpern and others ComC 24-Mar-2006
The deceased parents, being orthodox Jews, had first made standard wills and then made provision accoding to Jewish law. A dispute after the second death was referred to a Beth Din arbitration. After an initial resolution, various distributions were . .
mentionedIslington v Uckac and Another CA 30-Mar-2006
The council’s tenant had unlawfully secured assignment of a secure tenancy to the defendant. The council sought possession.
Held: A secure tenancy granted by an authority pursuant to a misrepresentation by the tenant is nonetheless valid. The . .
CitedSimms 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 . .
CitedGraves v Graves and others CA 3-Jul-2007
The parties had divorced and settled financial provision, but the former wife and her children came to need a house and one of the claimant’s properties became vacant, and she was allowed to occupy it as a tenant, with the majority of the rent being . .
CitedButters and Others v BBC Worldwide Ltd and Others ChD 20-Aug-2009
In the insolvency of Woolworths plc, a subsidiary sought to have valued its shareholding in a company in which the defendants were co-shareholders. It was argued that an earlier agreement between them had not be fully superceded by a subsequent one. . .
CitedHelmet 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 . .
CitedBalston Ltd v Headline Filters Ltd and Another ChD 1990
The claimant, a manufacturer of filter tubes, employed the defendant as a director. He gave notice to leave, but during his notice period, he was contacted by a customer who informed him of a meeting between that customer and the company at which . .
CitedLehman Brothers International (Europe) v Exotix Partners Llp ChD 9-Sep-2019
The parties had contracted to trade global depository notes issued by the Peruvian government. Each made mistakes as to their true value, thinking them scraps worth a few thousand dollars, whereas their true value was over $8m. On the defendant . .

Lists of cited by and citing cases may be incomplete.

Contract, Company

Leading Case

Updated: 29 November 2021; Ref: scu.181343

Moore Stephens (A Firm) v Stone Rolls Ltd (in liquidation): HL 30 Jul 2009

The appellants had audited the books of the respondent company, but had failed to identify substantial frauds by an employee of the respondent. The auditors appealed a finding of professional negligence, relying on the maxim ex turpi causa non oritur actio.
Held: (Mance and Scott LL dissenting) The appeal succeeded. The company could not bring a claim which was based upon its own unlawful actions. The Hampshire Land principle that knowledge of an agent would not be imputed to its principal where that knowledge related to the agents own breach of duty to the principal was a general principle of the law of agency and was not limited to claims. In the case of a one man company, the sole actor test could be applied to impute to the company the knowledge of its agent – in this case as to the fraud he was undertaking.
Lord Phillips summarised his conclusions: ‘1) Under the principle of ex turpi causa the court will not assist a claimant to recover compensation for the consequences of his own illegal conduct.
2) This appeal raises the question of whether, and if so how, that principle applies to a claim by a company against those whose breach of duty has caused or permitted the company to commit fraud that has resulted in detriment to the company.
3) The answer to this question is not to be found by the application of Hampshire Land or any similar principle of attribution. The essential issue is whether, in applying ex turpi causa in such circumstances, one should look behind the company at those whose interests the relevant duty is intended to protect.
4) While in principle it would be attractive to adopt such a course, there are difficulties in the way of doing so to which no clear resolution has been demonstrated.
5) On the extreme facts of this case it is not necessary to attempt to resolve those difficulties. Those for whose benefit the claim is brought fall outside the scope of any duty owed by Moore Stephens. The sole person for whose benefit such duty was owed, being Mr Stojevic who owned and ran the company, was responsible for the fraud.
6) In these circumstances ex turpi causa provides a defence to the claim.’
Lord Walker considered whether the liquidation of the ‘one man company’ made any difference, concluding: ‘It was argued for the appellants that the public policy defence should not bar claims brought by a company in insolvent liquidation, where the creditors were innocent parties who had been defrauded by Mr Stojevic. If that were right, it would create a very large gap in the public policy defence, since most fraudsters (individual and corporate) become insolvent sooner or later and have liabilities to those whom they have defrauded. Mr Brindle conceded that if Mr Stojevic had carried out his frauds directly (and not through a one-man company) neither he nor his trustee in bankruptcy could have resisted the public policy defence. That conclusion was reached by Langley J. (para 65(2)) and is clearly correct (see Fry LJ in Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147, 156). There is no good reason to apply a different rule to a company in liquidation. Apart from special statutory claims in respect of misfeasance, wrong trading and so on, it cannot assert any cause of action which it could not have asserted before the commencement of its liquidation, as Mr Brindle concedes. That is especially true in the context of the duties of an auditor, which are not owed to a company’s creditors.’

Lord Phillips of Worth Matravers, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Brown of Eaton-under-Heywood, Lord Mance
[2009] UKHL 39, Times 11-Aug-2009, [2009] 1 AC 1391, [2009] Bus LR 1356, [2009] PNLR 36, [2009] 3 WLR 455
Bailii
England and Wales
Citing:
At First InstanceStone and Rolls Ltd v Moore Stephens (A Firm) Comc 27-Jul-2007
The company claimed against its chartered accountants for negligence when acting as auditors. The sole directing mind of the company had used it as a vehicle for substantial frauds. The court was asked ‘whether and if so when can a claim by a . .
Appeal fromMoore Stephens (A Firm) v Stone and Rolls Ltd CA 18-Jun-2008
The company claimed against its accountants for negligence in not discovering the substantial dishonesty of the claimant’s employee, its directing mind and sole shareholder.
Held: Rimer LJ said that the critical question was whether it was . .
CitedRe Hampshire Land Company 9-Jul-1896
A company had borrowed from a building society. The borrowing was not properly authorised by resolution of the shareholders in general meeting The court was asked whether whether the knowledge of the company secretary common to both the company and . .
CitedHall v Hebert 29-Apr-1993
(Canadian Supreme Court) After they had been drinking heavily together, Mr Hebert, who owned a car, allowed Mr Hall to drive it, including initially to give it a rolling start down a road on one side of which there was a steep slope. The car . .
CitedGray v Barr CA 1971
A husband had accidentally shot and killed his wife’s lover after threatening him with a shotgun.
Held: The court confirmed the decision at first instance. He was not liable to be indemnified by his insurers for the losses claimed against him . .
CitedThackwell v Barclays Bank plc 1986
The plaintiff was party to a fraudulent scheme under which a cheque had been made payable to him. The plaintiff’s signature endorsing the cheque to a third party was forged and in reliance on the forgery the bank credited the third party. The . .
CitedAl Saudi Banque v Clarke Pixley 1990
An auditor does not generally owe a duty of care in tort to a company’s creditors. Millet J referred to the Court of Appeal decision in Caparo: ‘In my judgment, Caparo’s case is binding authority for the following propositions. (i) In cases of . .
CitedCaparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .
CitedMeridian Global Funds Management Asia Ltd v Securities Commission PC 26-Jun-1995
(New Zealand) The New Zealand statute required a holder of specified investments to give notice of its holding to a regulator as soon as it became aware of its holding. Unbeknown to any others in the company apart from one colleague, its chief . .
CitedTinsley v Milligan HL 28-Jun-1993
Two women parties used funds generated by a joint business venture to buy a house in which they lived together. It was vested in the sole name of the plaintiff but on the understanding that they were joint beneficial owners. The purpose of the . .
CitedAlexander v Rayson CA 1936
The action was for arrears of rent. The evidence at trial was that the plaintiff granted a lease to the defendant at a rent of andpound;1200 and contracted that certain services in connection with the flat would be performed. The plaintiff sent the . .
CitedHewison v Meridian Shipping Pte, Coflexip Stena Offshore Ltd, Flex Installer Offshore Ltd CA 11-Dec-2002
The claimant was awarded damages for injuries suffered in his work as a seaman. The respondents claimed that he should not receive damages, since he had made false declarations as to his health in order to obtain employment, hiding his epilepsy . .
CitedCross v Kirkby CA 18-Feb-2000
The claimant was a hunt saboteur and the defendant a local farmer. The claimant shouted to the defendant ‘You’re fucking dead’ and jabbed him in the chest and throat with a broken baseball bat. In order to ward off further blows, the defendant . .
CitedUnited Project Consultants Pte Ltd v Leong Kwok Onn 16-Aug-2005
(Supreme Court of Singapore – Court of Appeal) A taxpayer sought to recover from his accountant an administrative penalty under a statutory provision dealing with the innocent submission of an incorrect tax return.
Held: In determining whether . .

Cited by:
CitedLes Laboratoires Servier and Another v Apotex Inc and Others SC 29-Oct-2014
Ex turpi causa explained
The parties had disputed the validity a patent and the production of infringing preparations. The english patent had failed and damages were to be awarded, but a Canadian patent remained the defendant now challenged the calculation of damages for . .
CitedJetivia Sa and Another v Bilta (UK) Ltd and Others CA 31-Jul-2013
Defendants appealed against refusal of their request for a summary striking out for lack of jurisdiction, of the claims against them arising from their management of the insolvency of the first defendant. . .
CitedBilta (UK) Ltd and Others v Nazir and Others ChD 30-Jul-2012
The company was said to have engaged in a fraud based on false European Trading Scheme Allowances, and had been wound up by the Revenue. The liquidators, in the company name, now sought recovery from former directors and associates.
Held: The . .
Not to be followedJetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .

Lists of cited by and citing cases may be incomplete.

Professional Negligence, Company, Agency

Updated: 29 November 2021; Ref: scu.368929

Re Hampshire Land Company: 9 Jul 1896

A company had borrowed from a building society. The borrowing was not properly authorised by resolution of the shareholders in general meeting The court was asked whether whether the knowledge of the company secretary common to both the company and the society, as to the irregularity should be imputed to the society, so as to preclude the society from recovering the loan.
Held: The rule of law that information held by an agent in the course of his agency is to be imputed to his principal, has an exception where the agent is committing a fraud on his principal.
Vaughan Williams J said: ‘The case is very much more like the one which [counsel for the society] had to admit was an exception to the general rule that they sought to lay down, for they admitted that if Wills had been guilty of a fraud, the personal knowledge of Wills of the fraud that had had committed upon the company would not have been knowledge of the society of the facts constituting that fraud; because common sense at once leads one to the conclusion that it would be impossible to infer that the duty, either of giving or receiving notice, will be fulfilled where the common agent is himself guilty of fraud. It seems to me that if you assume here that Mr. Wills was guilty of irregularity – a breach of duty in respect of these transactions – the same inference is to be drawn as if he had been guilty of fraud. I do not know, I am sure, whether he was guilty of actual fraud; but whether his conduct amounted to fraud or to breach of duty, I decline to hold that his knowledge of his own fraud or of his own breach of duty is, under the circumstances, the knowledge of the company.’

Vaughan Williams J, Viscount Dunedin
[1896] 2 Ch 743, [1896] UKLawRpCh 122
Commonlii
England and Wales
Cited by:
CitedAbbey National Plc v Tufts CA 16-Feb-1999
A bankrupt husband, a mortgage broker, had applied for mortgage for his wife, fraudulently claiming that she had income. She appealed against an order for possession on the basis that he was agent of the bank, and that therefore the bank was fixed . .
CitedFassihim, Liddiardrams, International Ltd, Isograph Ltd v Item Software (UK) Ltd CA 30-Sep-2004
The first defendant (F) had been employed by a company involved in a distribution agreement. He had sought to set up a competing arrangement whilst a director of the claimant, and diverted a contract to his new company.
Held: A company . .
CitedMoore Stephens (A Firm) v Stone Rolls Ltd (in liquidation) HL 30-Jul-2009
The appellants had audited the books of the respondent company, but had failed to identify substantial frauds by an employee of the respondent. The auditors appealed a finding of professional negligence, relying on the maxim ex turpi causa non . .
CitedStone and Rolls Ltd v Moore Stephens (A Firm) Comc 27-Jul-2007
The company claimed against its chartered accountants for negligence when acting as auditors. The sole directing mind of the company had used it as a vehicle for substantial frauds. The court was asked ‘whether and if so when can a claim by a . .
AppliedMoore Stephens (A Firm) v Stone and Rolls Ltd CA 18-Jun-2008
The company claimed against its accountants for negligence in not discovering the substantial dishonesty of the claimant’s employee, its directing mind and sole shareholder.
Held: Rimer LJ said that the critical question was whether it was . .
CitedJC Houghton and Co v Northard, Lowe and Wills HL 1927
The court was asked whether the knowledge of the directors of the latter company should be attributed to it, with the effect that the latter company could and should be treated as estopped from denying that it had consented to a particular . .
CitedJetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .

Lists of cited by and citing cases may be incomplete.

Agency, Company

Leading Case

Updated: 29 November 2021; Ref: scu.181279

Moxon v Litchfield and Others, Re LCM Wealth Management Ltd: ChD 12 Dec 2013

The Petitioner sought redress in respect of (a) his removal from office as a director and his exclusion from management of the sixth respondent, LCM Wealth Management Limited and (b) the implementation (or purported implementation) of provisions in the Company’s Articles of Association and in an agreement between the Company’s shareholders which compel the transfer of Mr Moxon’s shares at par value if (as the other shareholders contend) he is to be characterised as a ‘Bad Leaver’ within the meaning of those provisions.

Hildyard J
[2013] EWHC 3957 (Ch)
Bailii
Companies Act 2006

Company

Updated: 26 November 2021; Ref: scu.518944

Gamatronic (UK) Ltd and Another v Hamilton and Others: QBD 30 Oct 2013

The claimant company alleged that its former directors, the defendants, had left taking confidential materials and equipment with them. The defendants now requested that the claim be struck out, saying that a binding compromise had been reached. The claimant denied the compromise.

Andrew Smith J
[2013] EWHC 3287 (QB)
Bailii
England and Wales

Company

Updated: 23 November 2021; Ref: scu.517253

Allan v Gold Reefs of West Africa Ltd: CA 19 Feb 1900

The company had altered its articles so as to give itself a lien on paid up shares in respect of the failure of the shareholder to pay calls on other shares which had not been fully paid up. The effect of the amendment was to alter the contractual rights of the shareholder.
Held: The amendment to the articles was within the power of the company under s.50 of the 1862 Act.
Lord Lindley MR said: ‘The power thus conferred on companies to alter the regulations contained in their articles is limited only by the provisions contained in the statute and the conditions contained in the company’s memorandum of association. Wide, however, as the language of section 50 is, the power conferred by it must, like all other powers, be exercised subject to those general principles of law and equity which are applicable to all powers conferred on majorities and enabling them to bind minorities. It must be exercised, not only in the manner required by law, but also bona fide for the benefit of the company as a whole, and it must not be exceeded. These conditions are always implied and are seldom if ever expressed but if they are complied with I can see no ground for judicially putting any other restrictions on the power conferred by the section and those contained in it . . Speaking therefore generally and without reference to any particular case, the section clearly authorises a limited company, formed with articles which confer no lien on fully paid up shares, and which allow them to be transferred without any fetter, to alter those articles by special resolution, and to impose a lien and restrictions on the registry of transfers of those shares by members indebted to the company . . But then comes the question whether this can be done so as to impose a lien or restriction in respect of a debt contracted before and existing at the time when the articles are altered. Again speaking generally, I am of opinion that the articles can be so altered and that, if they are altered bona fide for the benefit of the company, they will be valid and binding as altered on the existing holders of paid up shares whether such holders are indebted or not indebted to the company when the alteration is made.’
Romer LJ said: ‘certainly a shareholder could not say as against the company that he was entitled to special rights because he did not pay his debts.’
Vaughan Williams LJ said: ‘I also take it to be clear that the alteration must be made in good faith; and I take it that an alteration in the articles which involved oppression of one shareholder would not be made in good faith.’

Lord Lindley MR, Romer LJ
[1900] 1 Ch 656, [1900] UKLawRpCh 37
Commonlii
Companies Act 1862 50
England and Wales
Cited by:
CitedFaulkner and Another v Bennett and Others ChD 20-Dec-2011
The court was asked whether the principle in Gold Reefs could be applied to prevent a proposed repurchase of shares. . .
CitedThe Children’s Investment Fund Foundation (UK) v Attorney General and Others ChD 9-Jun-2017
The court considered the propriety of a payment made by a charitable company to a director for her loss of office. The charity was to transfer a substantial sum to a new charity headed by the departing director.
Held: The court approved the . .
CitedLehtimaki and Others v Cooper SC 29-Jul-2020
Charitable Company- Directors’ Status and Duties
A married couple set up a charitable foundation to assist children in developing countries. When the marriage failed an attempt was made to establish a second foundation with funds from the first, as part of W leaving the Trust. Court approval was . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 23 November 2021; Ref: scu.219202

Tekem Sea Abyss Ltd v Brandston Ltd; ‘The Ocean Enterprise’: AdCt 9 Jan 1997

ComC Shipping – registration of ships – – no statutory power to expunge the register – inherent – sale of ship to company in which seller held interest – fiduciary duty – breach – voidable contract – classification as ‘goods’ – Sale of Goods Act 1979 – goods – passing of voidable title – good faith – knowledge of company Company – power of director to bind company – agency – actual and ostensible authority Company – goods – passing of voidable title – Sale of Goods Act 1979 section 23 – good faith – knowledge of company

Geoffrey Brice QC
Unreported, 9 January 1997
Sale of Goods Act 1979 23, Merchant Shipping Act 1995 10(2)(I)
England and Wales

Transport, Company, Contract

Updated: 23 November 2021; Ref: scu.186612

Fakhry v Pagden and Another: CA 15 Sep 2020

Application seeking to set aside an ex parte order that three associated companies, which had been dissolved at the conclusion of their respective members’ voluntary liquidations, were restored to the register of companies and new liquidators, not the liquidators who had previously been in office, were appointed.

Lord Justice David Richards
[2020] EWCA Civ 1207
Bailii
England and Wales

Company

Updated: 23 November 2021; Ref: scu.653893

Ackerman v Ackerman and Others: ChD 12 Aug 2011

The parties disputed the division of assets within a group of companies.

Roth J
[2011] EWHC 2183 (Ch)
Bailii
England and Wales
Cited by:
CitedMG v AR FD 16-Nov-2021
Family Case: Costs Security depends on Case Merits
Application for security for costs in family cases.
Held: In contrast to civil cases generally, in a family case the merits of the application and the strength of the defence necessarily have to be carefully considered. It is only by . .

Lists of cited by and citing cases may be incomplete.

Company, Costs

Updated: 22 November 2021; Ref: scu.442740

Texdata Software Gmbh, Re: ECJ 26 Sep 2013

ECJ Company law – Freedom of establishment – Eleventh Directive 89/666/EEC – Disclosure of accounting documents – Branch of a capital company established in another Member State – Pecuniary penalty in the event of failure to disclose within the prescribed period – Right to effective judicial protection – Principle of respect for the rights of the defence – Effective, proportionate and dissuasive nature of the penalty

L. Bay Larsen, P
C-418/11, [2013] EUECJ C-418/11
Bailii
England and Wales

European, Company

Updated: 20 November 2021; Ref: scu.515587

Credit Suisse v Allerdale Borough Council: CA 20 May 1996

Builder’s Guarantee Ultra Vires LA

The council set out to provide a swimming pool using powers under s.19 of the 1976 Act. Purporting to use powers under s.111 of the 1972 Act, it set up a company to develop a site by building a leisure pool and time-share units, with a view to selling the time-share units to pay for the cost of building the pool. The council gave a guarantee to help the company to finance the project, and on the strength of this the company obtained a facility from the bank. The sale of the time-share units proved unsatisfactory and the company went into liquidation. The bank sued the council under the guarantee to recover the sums owed to it by the company.
Held: The guarantee was ultra vires where it had been given to a company when the authority was acting outside it’s proper powers. Where a statutory corporation purports to enter into a contract which it is not empowered by the relevant statute to enter into, the corporation lacks the capacity to make the supposed contract. This lack of capacity means that the document and the agreement it contains do not have effect as a legal contract. It exists in fact but not in law. It is a legal nullity. The purported contract which is in truth not a contract does not confer any legal rights on either party. Neither party can sue on it. Any third party dealing with a local authority should be aware of that fact [of limited capacity and competence] and of the potential legal risk.
Hobhouse LJ said: ‘The discretion of the court in deciding whether to grant any remedy is wide one. It can take into account many considerations, including the needs of good administration, delay, the effect on third parties, and the utility of granting the relevant remedy.’

Hobhouse LJ
Times 20-May-1996, [1997] QB 306
Local Government Act 1972 111, Local Government (Miscellaneous Provisions) Act 1976 819
England and Wales
Citing:
Appeal fromCredit Suisse v Allerdale Borough Council QBD 17-Jun-1994
A Local Authority’s guarantee for its own company was void, having been given for impermissible reasons. . .
AppliedLondon and Clydeside Estates v Aberdeen District Council HL 8-Nov-1979
Identifying ‘maandatory’ and ‘regulatory’
The appellants had sought a Certificate of Alternative Development. The certificate provided was defective in that it did not notify the appellants, as required, of their right to appeal. Their appeal out of time was refused.
Held: The House . .

Cited by:
CitedStretch v The United Kingdom ECHR 24-Jun-2003
The claimant had taken a lease of property from a local authority. Relying upon an option for renewal, he invested substantially in the property, but it was then decided that the option was ultra vires.
Held: Property rights protected under . .
CitedRegina v Soneji and Bullen HL 21-Jul-2005
The defendants had had confiscation orders made against them. They had appealed on the basis that the orders were made more than six months after sentence. The prosecutor now appealed saying that the fact that the order were not timely did not . .
CitedKilby v Basildon District Council Admn 26-Jul-2006
Tenants complained that the authority landlord had purported to vary a clause in his secure tenancy agreement which gave certain management rights to tenants.
Held: The powers to let on secure tenancies were governed by statute. The clause . .
CitedBirmingham City Council v Qasim and Others CA 20-Oct-2009
The council argued that the defendant was not a tenant granted to him as a secure tenancy since he had not been granted the tenancy in accordance with its policies. An employee had manipulated the Council’s system to grant tenancies to bypass the . .

Lists of cited by and citing cases may be incomplete.

Local Government, Contract, Company, Banking

Updated: 20 November 2021; Ref: scu.79620

Oakbank Oil Co (Ltd) v Crum: HL 12 Dec 1882

Dividends pro rata as to nominal paid up capital

The articles of association of a limited company provided that ‘the directors may, with the sanction of the company in general meeting, declare a dividend to be paid to the members in proportion to their shares.’ The articles also provided that ‘capital’ should mean ‘the capital for the time being of the company,’ and ‘shares’ the ‘shares into which the capital is divided.’ The capital consisted of 60,000 shares of pounds 1 each. Two-thirds of the shares were fully paid-up, and on the remaining third only 5s. per share had been paid.
Held: (aff. judgment of First Division) that under the terms of the articles of association dividends were to be paid in proportion to the nominal, and not in proportion to the paid-up capital held by each member.

Lord Chancellor, Lords Blackburn, Watson, Bramwell, and Fitzgerald
[1882] UKHL 244, 20 SLR 244
Bailii
Scotland

Company

Updated: 20 November 2021; Ref: scu.637747

Alfred Hirmann v Immofinanz Ag: ECJ 12 Sep 2013

ECJ OPINION – Company Law – Directive 77/91/EEC – Liability of a public limited liability company – Protection for investor relying on inaccurate information – Compatibility of a national rule providing for the cancellation of a share purchase transaction

Sharpston AG
C-174/12, [2013] EUECJ C-174/12, [2013] EUECJ C-174/12
Bailii, Bailii
Directive 77/91/EEC

European, Company

Updated: 20 November 2021; Ref: scu.515247

Musselwhite v CH Musselwhite and Son Ltd: ChD 1962

Voiting Rights Followed Entry on Company Registerr

Parties had agreed to transfer shares in a small family company for the payment of a sum of money by way of instalments over a period of time. The agreement provided the transfers of the shares should be executed and that the executed transfers and relevant share certificates should be deposited with the company solicitors until payment had been made in full. The transferor remained on the company’s register of members as the holder of the shares. The question arose as to the rights of the transferor to vote at the annual general meeting prior to the final payment with respect to the shares.
Held: A partly paid vendor of shares remaining on the register of members after the execution of the contract for sale retained the voting rights.

Russell J
[1962] Ch 964
England and Wales
Cited by:
CitedEnglewood Properties Limited v Patel and Another ChD 16-Feb-2005
The claimant was a property developer, which sought to sell a row of shops at auction. One lot was a Woolworths store, where the company owned both freehold and leasehold interests, with Woolworths occupying an underlease, which the claimant had . .
FollowedJRRT (Investments) v Haycraft ChD 1993
A purchaser of shares (under an inept agreement) raised a summons under RSC O.14A with the single issue of whether the purchaser was entitled to direct the vendor to vote the shares. . .

Lists of cited by and citing cases may be incomplete.

Contract, Company

Leading Case

Updated: 20 November 2021; Ref: scu.223744

Re Singh Brothers Contractors (North West) Ltd: ChD 27 Jun 2013

Derivative claim on behalf of the company under section 261 of the Companies Act 2006 against the first defendant, a director of the second defendant, for breach of director’s duty, breach of fiduciary duty and breach of trust. The claimant sought orders for damages, an account, further or other relief and costs. The claimant also sought an order that he be indemnified out of the company’s assets in respect of the legal costs of the derivative claim. It was said that the claimant expected to recover more than andpound;800,000.

Hdge QC HHJ
[2013] EWHC 2138 (Ch)
Bailii

Company

Updated: 19 November 2021; Ref: scu.514959

Eclairs Group Ltd and Another v JKX Oil and Gas Plc and Others: ChD 30 Aug 2013

Challenge was made to restrictions on voting imposed on the directors under the company’s articles.
Held: The purpose of article 42 is to provide a ‘sanction or incentive’ to remedy a failure to comply with the disclosure notice.

Mann J
[2013] EWHC 2631 (Ch), [2013] WLR(D) 373, [2014] Bus LR 18, [2014] 1 BCLC 202
Bailii, WLRD
Copanies Act 2006 793
England and Wales
Citing:
CitedIn re Ricardo Group Plc ChD 1989
The company had obtained a restrictions order under Part XV. An application was made to the court for relief.
Held: On the facts relief was refused. The respondent had secured discharge of the order under the liberty to apply, having provided . .
CitedIn re TR Technology Investment Trust Plc ChD 1988
The court was asked whether the limition on the circumstances in which the court could remove restrictions imposed under section 794, applied to a merely interim order.
Held: It did not. Hoffmann J said of the powers t demand information given . .

Cited by:
Appeal fromJKX Oil and Gas Plc and Others v Eclairs Group Ltd CA 13-May-2014
The court was asked as to important issues on the validity and constitutionality of restrictions imposed by the directors pursuant to Part 22 of the 2006 Act and the company’s Articles of Association, including the purported disenfranchisement of . .
At First InstanceEclairs Group Ltd and Glengary Overseas Ltd v JKX Oil and Gas Plc SC 2-Dec-2015
Company Director not Trustee but is Fiduciary
The Court was asked about an alleged ‘corporate raid’, an attempt to exploit a minority shareholding in a company to obtain effective management or voting control without paying what other shareholders would regard as a proper price.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 19 November 2021; Ref: scu.514978

In re a Company (No 0012209 of 1991): ChD 1992

It is an abuse of the process of the court to make a statutory demand or present a winding-up petition based on a claim to which there is a triable defence. Where a statutory demand is made but disputed on reasonable grounds, the creditor may find himself liable to indemnity costs on its dismissal.
Hoffmann J said: ‘It does seem to me that a tendency has developed, possibly since the decision in Cornhill Insurance plc v Improvement Services Ltd [1986] BCLC 26, [1986] 1 WLR 114, to present petitions against solvent companies as a way of putting pressure upon them to make payments of money which is bona fide disputed rather than to invoke the procedures which the rules provide for summary judgment. I do not for a moment wish to detract from anything which was said in the Cornhill Insurance case, which indeed followed earlier authority, to the effect that a refusal to pay an indisputable debt is evidence from which the inference may be drawn that the debtor is unable to pay. It was, however, a somewhat unusual case in which it was quite clear that the company in question had no grounds at all for its refusal. Equally it seems to me that if the court comes to the conclusion that a solvent company is not putting forward any defence in good faith and is merely seeking to take for itself credit which it is not allowed under the contract, then the court would not be inclined to re-strain presentation of the petition. But, if, as in this case, it appears that the defence has a prospect of success and the company is solvent, then I think that the court should give the company the benefit of the doubt and not do anything which would encourage the use of the Companies Court as an alternative to the RSC Ord 14 procedure.’

Hoffmann J
[1992] 2 All ER 797, [1992] 1 WLR 351, [1992] BCLC 865
Cited by:
CitedRidehalgh v Horsefield; Allen v Unigate Dairies Ltd CA 26-Jan-1994
Guidance for Wasted Costs Orders
Guidance was given on the circumstances required for the making of wasted costs orders against legal advisers. A judge invited to make an order arising out of an advocate’s conduct of court proceedings must make full allowance for the fact that an . .
CitedBNY Corporate Trustee Services Ltd and Others v Neuberger SC 9-May-2013
Potential Insolvency effect under guarantee
The various parties had entered into complex and substantial financial arrangements incorporating guarantees. The guarantees were conditional upon the guaranteed party being solvent. The parties disputed whether a party which would otherwise be . .

Lists of cited by and citing cases may be incomplete.

Legal Professions, Company, Insolvency

Updated: 19 November 2021; Ref: scu.278997

Guinness plc v Saunders: HL 8 Feb 1990

Director – no claim for payment without authority

A committee of the board of Guinness had authorised payment of remuneration to Mr Ward, who was a director. However, the articles of association did not give authority to a committee of the board (as opposed to the full board) to authorise such a payment. Mr Ward attempted to rely on section 727.
Held: The claim failed: ‘Mr. Ward had no right to remuneration without the authority of the board. Thus the claim by Guinness for repayment is unanswerable. If Mr. Ward acted honestly and reasonably and ought fairly to be excused for receiving pounds 5.2m. without the authority of the board, he cannot be excused from paying it back. By invoking section 727 as a defence to the claim by Guinness for repayment, Mr. Ward seeks an order of the court which would entitle him to remuneration without the authority of the board.’ (Lord Templeman)

Lord Templeman, Lord Goff
[1989] UKHL 2, [1990] 2 AC 663
Bailii
Companies Act 1985 727
England and Wales
Citing:
ApprovedHely-Hutchinson v Brayhead Ltd 1968
Directors are required to disclose their interests in contracts with the company: ”It is not contended that [the] section in itself affects the contract. The section merely creates a statutory duty of disclosure and imposes a fine for . .
Appeal fromGuinness plc v Saunders CA 1988
. .

Cited by:
MentionedUltraframe (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 . .
CitedKohli 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: 19 November 2021; Ref: scu.230297

Hely-Hutchinson v Brayhead Ltd: 1968

Directors are required to disclose their interests in contracts with the company: ”It is not contended that [the] section in itself affects the contract. The section merely creates a statutory duty of disclosure and imposes a fine for non-compliance. But it has to be read in conjunction with article [85]. The first sentence of that article is obscure. If a director makes or is interested in a contract with the company, but fails duly to declare his interest, what happens to the contract? Is it void, or is it voidable at the option of the company, or is it still binding on both parties, or what? The article supplies no answer to these questions. I think the answer must be supplied by the general law, and the answer is that the contract is voidable at the option of the company, so that the company has a choice whether to affirm or avoid the contract, but the contract must be either totally affirmed or totally avoided and the right of avoidance will be lost if such time elapses or such events occur as to prevent rescission of the contract . . .’

[1968] 1 QB 549
Companies Act 1948 317
England and Wales
Cited by:
ApprovedGuinness plc v Saunders HL 8-Feb-1990
Director – no claim for payment without authority
A committee of the board of Guinness had authorised payment of remuneration to Mr Ward, who was a director. However, the articles of association did not give authority to a committee of the board (as opposed to the full board) to authorise such a . .
CitedUltraframe (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: 19 November 2021; Ref: scu.230295

In re Yorkshire Woolcombers Association Ltd: CA 2 Jan 1903

Nature of Company’s Debenture Charge

The court considered the nature of a debenture charge. Romer LJ said: ‘I certainly do not intend to attempt to give an exact definition of the term ‘floating charge’, nor am I prepared to say that there will not be a floating charge within the meaning of the Act, which does not contain all the three characteristics . . ‘. ‘I certainly think that if a charge has the three characteristics that I am about to mention it is a floating charge. (1) If it is a charge on a class of assets of a company present and future; (2) if that class is one which, in the ordinary course of business of the company, would be changing from time to time; and (3) if you find that by the charge it is contemplated that, until some future step is taken by or on behalf of those interested in the charge, the company may carry on its business in the ordinary way as far as concerns the particular class of assets I am dealing with.’ and (Vaughan Williams LJ) ‘ . . what you do require to make a specific security is that the security whenever it has once come into existence, and been identified or appropriated as a security, shall never thereafter at the will of the mortgagor cease to be a security.’

Romer LJ, Vaughan Williams LJ
[1903] 2 Ch 295
England and Wales
Citing:
Appeal fromIn re Yorkshire Woolcombers Association Ltd ChD 1903
Farwell J said: ‘A charge on all book debts which may now be, or at any time hereafter become charged or assigned, leaving the mortgagor or assignor free to deal with them as he pleases until the mortgagee or assignee intervenes, is not a specific . .

Cited by:
Appeal fromIllingworth v Houldsworth HL 1904
A clause in a floating charge allowing a company to continue to trade in the assets charged: ‘contemplates not only that it should carry with it the book debts which were then existing, but it contemplates also the possibility of those book debts . .
CitedNational Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
CitedSupercool Refrigeration and Air Conditioning v Hoverd Industries Ltd ChD 1994
(New Zealand) The court noted a greater reluctance in Australia and Ireland than in England to accept the creation of a fixed charge over present and future book debts.
Tompkins J said:’ a requirement to pay the proceeds of the book debts . .
CitedNational Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
CitedNational Westminster Bank plc v Spectrum Plus Limited and others HL 30-Jun-2005
Former HL decision in Siebe Gorman overruled
The company had become insolvent. The bank had a debenture and claimed that its charge over the book debts had become a fixed charge. The preferential creditors said that the charge was a floating charge and that they took priority.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company, Banking

Updated: 19 November 2021; Ref: scu.191954

In re Yorkshire Woolcombers Association Ltd: ChD 1903

Farwell J said: ‘A charge on all book debts which may now be, or at any time hereafter become charged or assigned, leaving the mortgagor or assignor free to deal with them as he pleases until the mortgagee or assignee intervenes, is not a specific charge, and cannot be. The very essence of a specific charge is that the assignee takes possession, and is the person entitled to receive the book debts at once. So long as he licenses the mortgagor to go on receiving the book debts and carry on the business, it is within the exact definition of a floating security.’

Farwell J
[1903] 2 Ch 284
England and Wales
Cited by:
Appeal fromIn re Yorkshire Woolcombers Association Ltd CA 2-Jan-1903
Nature of Company’s Debenture Charge
The court considered the nature of a debenture charge. Romer LJ said: ‘I certainly do not intend to attempt to give an exact definition of the term ‘floating charge’, nor am I prepared to say that there will not be a floating charge within the . .
CitedNational Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
CitedIn Re Westmaze Ltd (In Administrative Receivership) ChD 15-May-1998
Westmaze were mechanical engineers. They gave a charge to secure borrowings, which described itself as a fixed charge.
Held: A Charge over a company’s book and trading assets was in fact floating even though described as a fixed charge unless . .
At First InstanceIllingworth v Houldsworth HL 1904
A clause in a floating charge allowing a company to continue to trade in the assets charged: ‘contemplates not only that it should carry with it the book debts which were then existing, but it contemplates also the possibility of those book debts . .

Lists of cited by and citing cases may be incomplete.

Banking, Company

Updated: 19 November 2021; Ref: scu.191953

Guinness plc v Saunders: CA 1988

[1988] 1 WLR 863
Companies Act 1985 317
England and Wales
Cited by:
CitedDEG-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 . .
Appeal fromGuinness plc v Saunders HL 8-Feb-1990
Director – no claim for payment without authority
A committee of the board of Guinness had authorised payment of remuneration to Mr Ward, who was a director. However, the articles of association did not give authority to a committee of the board (as opposed to the full board) to authorise such a . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 19 November 2021; Ref: scu.187428

Re International Tin Council: ChD 1987

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

Millet J
[1987] Ch 419, [1987] 2 WLR 1229, [1987] 1 All ER 890
England and Wales
Citing:
See AlsoMaclaine Watson and Co Ltd v International Tin Council ChD 1987
Millett J said: ‘The ITC contend there is no jurisdiction to make such an order [an order for discovery of assets] in the absence of a Mareva injunction. It is, however, fallacious to reason from the fact that an order for discovery can be made as . .

Cited by:
Appeal fromRe International Tin Council CA 1989
Creditors sought to treat the International Tin Council as an ‘association’ for the purposes of a provision under the Companies Act 1985 allowing for unregistered companies to be wound up.
Held: The decision in Re a Company was binding. The . .
CitedHackney v Side By Side (Kids) Ltd QBD 14-Jul-2003
The defendant sought a stay of a warrant for possession. It had submitted to an order for possession by consent in return for a promise of alternative accomodation. They sought a stay under section 89, saying that the claimant had not complied with . .
CitedMcGrath and Honey v McMahon and Others, Re HIH Casualty and General Insurance Ltd and others CA 9-Jun-2006
The insurance company was to be wound up. It operated internationally but was registered in Australia. The Australian liquidator now sought an order for the transfer of assets held here to Australia.
Held: It was inevitable that cross border . .
CitedMcGrath and others v Riddell and others HL 9-Apr-2008
(Orse In Re HIH Casualty and General Insurance Ltd)
HIH, an Australian Insurance company, became insolvent. An order was sought for the collection and remission of it assets in England under a letter of request from the Australia Court.
CitedBilta (UK) Ltd and Others v Nazir and Others ChD 30-Jul-2012
The company was said to have engaged in a fraud based on false European Trading Scheme Allowances, and had been wound up by the Revenue. The liquidators, in the company name, now sought recovery from former directors and associates.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company, Insolvency, Jurisdiction

Updated: 19 November 2021; Ref: scu.185746

Arrow Nominees Inc and Another v Blackledge and Others: CA 22 Jun 2000

A petition had been lodged alleging unfair prejudice in the conduct of the company’s affairs. The defendants alleged that when applying for relief under section 459, the claimants had attempted to pervert the course of justice by producing forged or falsified documentation in discovery. The forgery was admitted.
Held: If a party to litigation behaved in such a way as make it impossible safely to grant a judgment in his favour, or, where the behaviour amounted to an abuse of the processes of the court, the court must decline to allow that party to be heard, and to give judgment against him. The object of the rules of discovery was to secure a fair trial. A failure in disclosure might normally not defeat a claim, but a determined attempt to prevent a fair trial should do so: ‘A decision to stop the trial in those circumstances is not based on the court’s desire (or any perceived need) to punish the party concerned; rather it is a proper and necessary response where a party has shown that his object is not to have a fair trial which it is the court’s function to conduct, but to have a trial the fairness of which he has attempted (and continues to attempt) to compromise.’
As to pre-CPR cases: ‘The old authorities are of interest only as the straws in the gale force winds of change which blew in Lord Woolf’s reforms.’ and ‘The attempted perversion of justice is the very antithesis of parties coming before the court on an equal footing. ‘
Further, in this context, a fair trial is a trial which is conducted without an undue expenditure of time and money; and with a proper regard to the demands of other litigants upon the finite resources of the court. The court does not do justice to the other parties to the proceedings in question if it allows its process to be abused so that the real point in issue becomes subordinated to an investigation into the effect which the admittedly fraudulent conduct of one party in connection with the process of litigation has had on the fairness of the trial itself. That, as it seems to me, is what happened in the present case. The trial was ‘hijacked’ by the need to investigate what documents were false and what documents had been destroyed. The need to do that arose from the facts (i) that the petitioners had sought to rely on documents which Nigel Tobias had forged with the object of frustrating a fair trial and (ii) that, as the judge found, Nigel Tobias was unwilling to make a frank disclosure of the extent of his fraudulent conduct, but persisted in his attempts to deceive. The result was that the petitioners’ case occupied far more of the court’s time than was necessary for the purpose of deciding the real points in issue on the petition. That was unfair to the Blackledge respondents; and it was unfair to other litigants who needed to have their disputes tried by the court.
In my view, having heard and disbelieved the evidence of Nigel Tobias as to the extent of his fraudulent conduct, and having reached the conclusion (as he did) that Nigel Tobias was persisting in his object of frustrating a fair trial, the judge ought to have considered whether it was fair to the respondents – and in the interests of the administration of justice generally – to allow the trial to continue. If he had considered that question, then – as it seems to me – he should have come to the conclusion that it must be answered in the negative. A decision to stop the trial in those circumstances is not based on the court’s desire (or any perceived need) to punish the party concerned; rather, it is a proper and necessary response where a party has shown that his object is not to have the fair trial which it is the court’s function to conduct, but to have a trial the fairness of which he has attempted (and continues to attempt) to compromise.’

Roch, Ward, Chadwick LJJ
Times 07-Jul-2000, [2000] CP Rep 59, [2000] EWCA Civ 200, [2001] BCC 591, [2000] BCLC 167, [2000] WL 775004
Bailii
Companies Act 1985 459
England and Wales
Citing:
Appeal fromArrow Nominees Inc, Blackledge v Blackledge ChD 2-Nov-1999
The applicants sought to strike out a claim under section 459. The two companies sold toiletries, the one as retail agent for the other. They disputed the relationship of the companies, and the use of a trading name. Documents were disclosed which . .
CitedIn re Saul D Harrison and Sons plc CA 1995
The ‘legitimate expectations’ of a party were a label for the ‘correlative right’ to which a relationship between company members may give rise when, on equitable principles, it would be regarded as unfair for a majority to exercise a power . .
CitedO’Neill and Another v Phillips and Others; In re a Company (No 00709 of 1992) HL 20-May-1999
The House considered a petition by a holder of 25 of the 100 issued shares in the company against the majority shareholder. The petitioner, an ex-employee, had been taken into management and then given his shares and permitted to take 50% of the . .
CitedAllen v Sir Alfred McAlpine and Sons Ltd CA 1968
The court described the peculiarly difficult position of a solicitor sued for the negligence of losing litigation for his client by reason of having his client’s claim struck out: ‘It is true that if the action for professional negligence were . .
CitedLandauer Ltd v Comins and Co (a firm) CA 14-May-1991
The first instance Judge had struck out a claim under the provisions of order 24 rule 16(1) in circumstances where a number of relevant documents did not appear on the plaintiffs list of documents and were found to have been destroyed, the . .
CitedLogicrose Ltd v Southend United Football Club Ltd CA 5-Feb-1988
The agent required the contractual counterparty to pay a bribe of pounds 70,000 to an offshore account.
Held: The bribe was held to be recoverable by the principal whether the principal rescinded or affirmed the contract because it was a . .
CitedBiguzzi v Rank Leisure Plc CA 26-Jul-1999
The court’s powers under the new CPR to deal with non-compliance with time limits, were wide enough to allow the court to allow re-instatement of an action previously struck out. The court could find alternative ways of dealing with any delay which . .
CitedUCB Corporate Services Ltd (formerly UCB Bank plc) v Halifax (SW) Ltd CA 6-Dec-1999
It was proper to strike out a claim for abuse of process where the party had been involved in a wholesale disregard of the Civil Procedure Rules and of court orders. The court has a range of remedies appropriate to the degree of such disregard. . .
CitedPurdy v Cambran 17-Dec-1999
It is necessary to concentrate on the intrinsic justice of a particular case in the light of the overriding objective. ‘For the reasons which I have just given, I think that the question is whether the claim has no real prospect of succeeding at . .
CitedBirkett v James HL 1977
Exercise of Power to Strike Out
The court has an inherent power to strike out an action for want of prosecution, and the House set down the conditions for its exercise. The power is discretionary and exercisable only where (a) there has been inordinate and inexcusable delay and . .
CitedArbuthnot Latham Bank Limited; Nordbanken London Branch v Trafalgar Holdings Limited; Ashton and Ashton CA 16-Dec-1997
The issue was the appropriateness of a Court striking an action out where there has been considerable delay if: (i) the cause of action relied upon by the plaintiff in the proceedings would be statute barred if the action were to be struck out, but . .
CitedChoraria v Sethia CA 15-Jan-1998
Inordinate and inexcusable delay flouting court rules could itself constitute abuse of process irrespective of the absence of prejudice. A ‘complete, total or wholesale disregard, put it how you will, of the Rules of Court … is capable of . .
CitedMiles v Mcgregor CA 23-Jan-1998
Increase in findings of inordinate delay accompanied increased reluctance to strike out in absence of established prejudice to other party: ‘The abuse of process route is for cases … when the conduct amounts to an affront to the court and its . .
CitedLace Co-Ordinates Ltd v Nem Insurance Co Ltd CA 19-Nov-1998
Referring to the new Civil Procedure Rules: ‘These guidelines … create an entirely new climate in which the court is required to examine the plaintiff’s conduct by reference to the overall interests of justice and fairness (including . .
Appeal FromArrow Nominees Inc, Blackledge (L) v Blackledge (G), Blackledge (M), Blackledge (GR and MM) ChD 21-Jan-2000
The claimants had begun proceedings claiming unfair prejudice by the defendants in the management of the business. The defendants sought to have the petition struck out saying that the claimants had used falsified documents to base their petition. . .

Cited by:
CitedDouglas, Zeta-Jones, Northern and Shell Plc v Hello! Ltd, Hola Sa, Junco, The Marquesa De Varela, Neneta Overseas Ltd, Ramey ChD 27-Jan-2003
The claimants sought an order striking out the defendants’ defence on the grounds that, by destroying documents, the possibility of a fair trial had been prejudiced.
Held: Refusing the order, save as to certain paragraphs of the defence, the . .
CitedA, B, C, D, E, F, G, H, Mahmoud Abu Rideh Jamal Ajouaou v Secretary of State for the Home Department CA 11-Aug-2004
The claimants had each been detained without trial for more than two years, being held as suspected terrorists. They were free leave to return to their own countries, but they feared for their lives if returned. They complained that the evidence . .
See AlsoArrow Nominees Inc, Blackledge (L) v Blackledge (G), Blackledge (M), Blackledge (GR and MM) ChD 21-Jan-2000
The claimants had begun proceedings claiming unfair prejudice by the defendants in the management of the business. The defendants sought to have the petition struck out saying that the claimants had used falsified documents to base their petition. . .
CitedRidsdill and others v Smith and Nephew Medical, Duffy, Whittleton EAT 22-Jun-2006
EAT Practice and Procedure – Striking-out/dismissal.
Chairman’s decision to strike out claims which had not been actively pursued and when there had been failure to comply with Tribunal orders. The appeal . .
CitedAbegaze v Shrewsbury College of Arts and Technology CA 20-Feb-2009
In 2000 the claimant succeeded in his claim for discrimination, but had not pursued his remedy. He now appealed against a refusal to allow him to take it further. He had initially failed to pursue the matter for ill health. He later refused to . .
See AlsoArrow Nominees Inc and others v Blackledge and others CA 28-Feb-2002
. .
CitedBurns v Royal Mail Group Plc (No 2) (Formerly Consignia Plc), Humphrey EAT 14-Jan-2004
The hearing was an adjourned second hearing. The appeal on sex discrimination had been dismissed, and the balance of the claim for constructive unfair dismissal was adjourned. At that adjourned hearing the claimant now sought to re-open the claims . .
CitedShah v Ul-Haq and Others CA 9-Jun-2009
The defendant appealed against a refusal to strike out the claimant’s action saying that the claimant had been involved in a fraud upon the court in an earlier associated claim.
Held: The Rule gave no power to strike out a claim on such a . .
CitedSt Albans Girls School and Another v Neary CA 12-Nov-2009
The claimant’s case had been struck out after non-compliance with an order to file further particulars. His appeal was allowed by the EAT, and the School now itself appealed, saying that the employment judge had wrongly had felt obliged to have . .
CitedSecretary of State for Business, Innovation and Skills v Doffman and Another ChD 11-Oct-2010
The defendants applied for directors’ disqualification proceedings for the claim to be struck out or dismissed on the ground that the respondent had breached their rights to a fair trial under Article 6 of the European Convention on Human Rights . .
See AlsoArrow Nominees Inc and Another v Blackledge and others CA 13-Jul-2004
. .
CitedFairclough Homes Ltd v Summers SC 27-Jun-2012
The respondent had made a personal injury claim, but had then been discovered to have wildly and dishonestly exaggerated the damages claim. The defendant argued that the court should hand down some condign form of punishment, and appealed against . .
CitedSummers v Fairclough Homes Ltd CA 7-Oct-2010
The claimant was said to have fraudulently exaggerated the damages associated with a valid personal injury claim. The defendant argued that the claim should be struck out entirely as a punishment.
Held: The defendant’s appeal failed. The Court . .
CitedZahoor and Others v Masood and Others CA 3-Jul-2009
It was argued that the judge should have struck the claim out as an abuse of process on the ground that some at least of the claims were based on forged documents and false written and oral evidence.
Held: Arrow Nominees was authority for the . .
CitedBilta (Uk) Ltd v Nazir and Others ChD 24-Nov-2010
The company had been wound up by the Revenue on the basis that it had been used for a substantial VAT fraud. The liquidators now sued those said to have participated. A defendant denied the jurisdiction because of a disputed arbitration agreement. . .
CitedHughes Jarvis Ltd v Searle and Another CA 15-Jan-2019
The claimant and director appealed from orders associated with a finding of contempt of court. The Director, the case having been adjourned overnight during the course of his evidence, and despite warnings to the contrary had sought to communicate . .
CitedEmuemukoro v Croma Vigilant (Scotland) Ltd and Another (Practice and Procedure) EAT 22-Jun-2021
Response Properly Struck Out – Non-compliance
On the first day of a five-day hearing to consider the Claimant’s claims of unfair dismissal, wrongful dismissal and holiday pay, the Tribunal struck out the Respondents’ Response for failing to comply with the Tribunal’s orders. Those failures . .

Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company

Updated: 19 November 2021; Ref: scu.77874

Simpson v The Westminster Palace Hotel Company Limited: 4 Jun 1860

[1860] EngR 817, (1860) 2 De G F and J 141, (1860) 45 ER 575
Commonlii
England and Wales
Cited by:
CitedYorkshire Miners’ Association and Others v Howden and Others HL 14-Apr-1905
A miners’ association, registered under the Trade Union Act 1871, made certain payments from its funds to its members, who were out of employment, in circumstances which involved a direct contravention of the rules of the association. Held (Lords . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 17 November 2021; Ref: scu.285656

In re Re Rose, Midland Bank Executor and Trustee Company Limited v Rose: ChD 1949

The testator handed a transfer of the relevant shares to the donee, Mr Hook, together with the relevant certificates. The transfer had not been registered by the date of his death.
Held: Equity will not compel an imperfect gift to be completed. Nevertheless, the testator had done everything in his power to divest himself of the shares in question to Mr Hook. He had executed a transfer. It was not suggested that the transfer was not in accordance with the company’s regulations. He had handed that transfer together with the certificates to Mr Hook. There was nothing else the testator could do. Mr Hook’s legal title would not be perfected until the directors passed the transfer for registration, but that was not an act which the testator had to do, it was an act which depended on the discretion of the directors. The gift was effective

Jenkins J
[1949] Ch 78
England and Wales
Cited by:
CitedPennington and Another v Waine, Crampton and others CA 4-Mar-2002
The deceased had made a gift of shares. She had executed a transfer, and acting upon the promise, the donee had agreed to become a director which he could only do if he also became a shareholder. The transfer was delivered to the deceased’s agent, . .
ApprovedIn re Rose, Rose v Inland Revenue Commissioners CA 1952
The deceased had executed instruments of transfer and delivered them with the relevant certificates to the transferees.
Held: The transfers were transferred the whole of the deceased’s title both legal and equitable in the shares and all . .
CitedMascall v Mascall CA 13-Jun-1984
The question was whether a gift of land was completely constituted by delivery of the land certificate
Held: Equity will not come to the aid of a volunteer. Therefore, if a donee needs to get an order from a court of equity in order to . .
CitedPennington and Another v Waine, Crampton and others CA 4-Mar-2002
The deceased had made a gift of shares. She had executed a transfer, and acting upon the promise, the donee had agreed to become a director which he could only do if he also became a shareholder. The transfer was delivered to the deceased’s agent, . .
CitedBurnett’s Trustee v Grainger and Another HL 4-Mar-2004
A flat was sold, but before the purchasers registered the transfer, the seller was sequestrated, and his trustee registered his own interest as trustee. The buyer complained that the trustee was unjustly enriched.
Held: The Act defined the . .
Appeal fromIn re Rose, Rose v Inland Revenue Commissioners CA 1952
The deceased had executed instruments of transfer and delivered them with the relevant certificates to the transferees.
Held: The transfers were transferred the whole of the deceased’s title both legal and equitable in the shares and all . .
MentionedZeital and Another v Kaye and Others CA 5-Mar-2010
The deceased had held an apartment through beneficial interests in shares in a limited company. He died intestate. The parties disputed the ownership of the two shares. The company had been put into a members’ liquidation, and the company liquidator . .

Lists of cited by and citing cases may be incomplete.

Company, Wills and Probate, Equity

Updated: 17 November 2021; Ref: scu.183412

Lily Property Nominees Ltd and Another v Stonebridge and Others: ChD 31 Jul 2020

This is an unfair prejudice petition under section 994 of the Companies Act 2006 concerning a dispute between homeowners and residents of a private estate in South London. Each holds a share in the company which manages the common parts of the estate. The Petitioners claim that the company’s affairs have been managed in bad faith, resulting in their interests in the company being unfairly prejudiced.

Insolvency and Companies Court Judge Burton
[2020] EWHC 2113 (Ch)
Bailii
England and Wales

Company, Equity

Updated: 17 November 2021; Ref: scu.653372

Caparo Industries plc v Dickman: QBD 5 Aug 1988

The plaintiff complained that they had suffered losses after purchasing shares in a company, relying upon statements made in the accounts by the auditors (third defendants).
Held: The claim failed. Whilst auditors might owe statutory duties to shareholders as a class, there was no common law duty to individual shareholders such as would enable an individual shareholder to recover damages for loss sustained by him in acting in reliance upon the audited accounts.

Sir Neil Lawson
[1988] BCLC 387, Times, 5 August 1988
England and Wales
Cited by:
Appeal fromCaparo Industries plc v Dickman CA 1989
The plaintiffs had purchased shares in a company, relying upon accounts prepared by the second defendant auditors. They appealed against a decision that the auditors did not owe them a duty in negligence, not being shareholders.
Held: The . .
At QBDCaparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company, Professional Negligence

Updated: 17 November 2021; Ref: scu.552889

Caparo Industries plc v Dickman: CA 1989

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

Bingham LJ, O’Connor LJ
[1989] QB 653
England and Wales
Citing:
Appeal fromCaparo Industries plc v Dickman QBD 5-Aug-1988
The plaintiff complained that they had suffered losses after purchasing shares in a company, relying upon statements made in the accounts by the auditors (third defendants).
Held: The claim failed. Whilst auditors might owe statutory duties to . .
AdoptedPeabody Donation Fund v Sir Lindsay Parkinson and Co Ltd HL 18-Oct-1983
Architects proposed a system of flexible drains for a site, but the contractors persuaded them to accept rigid drains which once laid proved inadequate at considerable cost. The local authority had permitted the departure from the plans.
Held: . .

Cited by:
At CACaparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Professional Negligence, Company

Updated: 17 November 2021; Ref: scu.552890

Cukurova Finance International Ltd and Another v Alfa Telecom Turkey Ltd: PC 9 Jul 2013

British Virgin Islands

Lord Neuberger, Lord Mance, Lord Kerr, Lord Clarke, Lord Sumption
[2013] UKPC 20, [2013] 4 All ER 936
Bailii
Commonwealth
Citing:
See AlsoCukurova Finance International Ltd and Another v Alfa Telecom Turkey Ltd PC 5-May-2009
(British Virgin Islands) Shares in two companies incorporated under the BVI Business Companies Act 2004, Cukurova Finance International Ltd and Cukurova Telecoms Holdings Ltd were provided as security under two sets of equitable mortgages, one set . .
See AlsoCukurova Finance International Ltd and Others v Alfa Telecom Turkey Ltd PC 23-May-2012
(British Virgin Islands) Interlocutory issue as to who should manage the affairs of the Turkcell mobile telephone business pending the Board’s final adjudication (after a hearing which should take place this autumn) on the rights and wrongs of what . .
See AlsoCukurova Finance International Ltd and Another v Alfa Telecom Turkey Ltd PC 30-Jan-2013
(British Virgin Islands) The claimant sought to recover shareholdings given in charge.
Held: There was an event of default, which entitled ATT to accelerate the loan and to appropriate – or forfeit – the charged shares, but that relief against . .

Cited by:
See AlsoCukurova Finance International Ltd and Another v Alfa Telecom Turkey Ltd PC 29-Jul-2013
(British Virgin Islands) . .
See AlsoCukurova Holding As v Sonera Holding Bv PC 13-May-2014
(British Virgin Islands) The appellant sought to have set aside the Final Decision of an arbitrator. . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 17 November 2021; Ref: scu.513389

Re Probe Data Systems Ltd (No.3): CA 1992

An appeal from a director disqualification is to be under the Insolvency Rules.

[1992] BCC 110
Company Directors Disqualification Act 1986 6
England and Wales
Cited by:
CitedSecretary of State for Trade and Industry v Paulin ChD 13-May-2005
The director sought to appeal an order disqualifying him form acting as a company director.
Held: The disqualification proceedings were properly charactised as insolvency proceedings and therefore there was no requirement for permission to . .

Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 16 November 2021; Ref: scu.225440

Verderame v Commercial Union Assurance Co Plc: CA 2 Apr 1992

The insurance brokers, acting to arrange insurance for a small private limited company did not owe a duty in tort to the directors of that company personally. Where an action was brought in a tort and in breach of contract, damages could not be awarded on the tort where they were not available in contract.

Balcombe LJ
[1992] BCLC 793, Times 02-Apr-1992
England and Wales
Citing:
FollowedWatts and Co v Morrow CA 30-Jul-1991
The plaintiff had bought a house on the faith of the defendant’s report that there were only limited defects requiring repair. In fact the defects were much more extensive. The defendant surveyor appealed against an award of damages after his . .

Cited by:
CitedJohnson v Gore Wood and Co (a Firm) CA 12-Nov-1998
The claimant had previously issued a claim against the defendant solicitors through his company. He now sought to pursue a claim in his own name. It was resisted as an abuse of process, and on the basis that no personal duty of care was owed to the . .
CitedHamilton Jones v David and Snape (a Firm) ChD 19-Dec-2003
The claimant was represented by the respondent firm of solicitors in an action for custody of her children. Through their negligence the children had been removed from the country. She sought damages for the distress of losing her children.
Agency, Insurance, Company, Contract, Negligence, Damages

Updated: 16 November 2021; Ref: scu.181818

European Commission v Kingdom of The Netherlands: ECJ 20 Jun 2013

ECJ Failure of a Member State to fulfil obligations – Directive 2005/56/EC – Cross-border mergers of limited liability companies – Article 16(2)(a) and (b) – Company resulting from a cross-border merger – Employees employed in the Member State where the company has its registered office or in other Member States – Participation rights – Failure to provide identical rights

C-635/11, [2013] EUECJ C-635/11
Bailii
Directive 2005/56/EC
European

European, Company

Updated: 14 November 2021; Ref: scu.511002