Category: Company

Kovats v TFO Management Llp and Another: EAT 21 Apr 2009

EAT JURISDICTIONAL POINTS: Worker, employee or neither
Can a partner in a limited liability partnership be an employee? The EAT decided that on the facts of the case the Appellant was a partner in a limited liability partnership and not an employee. Appeal dismissed.
Birtles J said: ‘Parliament has thus expressly provided that the legal test which determines whether a person is a partner or an employee of a partnership also determines whether a member of an LLP is employed by the LLP. ‘ The employment tribunal had correctly concluded that: ‘(i) Section 4(4) of the Limited Liability Partnership Act is the starting point. That is that a member of an LLP, such as the Claimant, shall not be regarded for any purpose as employed by the LLP unless, if he and the other members were partners in the partnership, he would be regarded for that purpose as employed by the partnership.
(ii)’The ‘any purpose’ and ‘that purpose’ must be regarded in this case as a reference to the Claimant’s work as chief investment officer, and we have to ask ourselves whether if this was a partnership in the normal sense, presumably under the auspices of the Partnership Act 1890, the Claimant’s role as CIO would be regarded as employment.’

Judges:

Birtles J

Citations:

[2009] UKEAT 0357 – 08 – 2104, [2009] ICR 1140

Links:

Bailii

Statutes:

Limited Liability Partnerships Act 2000 1, Partnership Act 1890

Cited by:

Cited – Tiffin v Lester Aldridge Llp CA 1-Feb-2012
The claimant had been a partner with the respondent firm. He appealed against the rejection of his claim for unfair dsmissal on the basis that he had not been an employee.
Held: The appeal failed. Had this been an unlimited partnership under . .
Cited – Clyde and Co Llp v Van Winkelhof EAT 26-Apr-2012
EAT JURISDICTIONAL POINTS
Worker, employee or neither
Working outside the jurisdiction
Whether LLP equity member was a limb (b) worker under section 230(3). Allowing Claimant’s appeal, she was. . .
Lists of cited by and citing cases may be incomplete.

Employment, Company

Updated: 24 July 2022; Ref: scu.341212

Secretary of State v Nimley: ChD 5 Feb 2002

Directors had been tried and convicted of offences which could have founded a s2 disqualification order. After they had been sentenced and left the dock, prosecuting counsel said to the judge: ‘Your Honour has made no reference to disqualification under the Act, so I take it your Honour makes no order?’ to which the judge replied: ‘I think, Mr. Henderson, I was concentrating primarily on achieving proper balance on sentencing. I think it seems unlikely, given the time that has elapsed, that any of these defendants is going to be involved in running a company again. I think in all the circumstances I will not make an order, and certainly in the case of these defendants I think it will be no kindness to bring them back to the dock for imposing such an order.’
Held: (ex tempore) It was not an abuse of process for the Secretary of State to bring proceedings in the civil court under s2 in circumstances where a criminal court had previously refused to impose such an order.
HHJ Rich QC said of the passage quoted: ‘I construe those observations . . as indicating that at a point in time when he at least thought he had the power to add a disqualification order to the sentence he had just imposed, he considered doing so and determined not to do so.’
He continued: ‘the provisions of s2 of the 1986 Act, if they are to mean anything at all, must mean that this court does have jurisdiction to impose a disqualification order at least in circumstances where the convicting court has not. If it does not have power to impose it in such circumstances, it never has power to do so at all, and yet the section makes quite clear that ‘the court’ includes this court.
A possible circumstance where the jurisdiction might be exercised, without [reaching as wide a conclusion] as the one I have just suggested is if it were limited to the case where the convicting court had merely failed to exercise its jurisdiction by oversight or mistake and had not considered doing so. But I reject that as a possible construction of s2 because I cannot think that, without express words, a jurisdiction would be conferred on this court based on the assumption that other courts of competent jurisdiction failed to exercise their duty . .
The question of whether [an] application under s4 or s6 may amount to an abuse of process in circumstances where there had been a prior conviction giving rise to the opportunity in the convicting court to impose a disqualification order has been considered in two cases by this court. [In Rayna Mr. Anthony Mann QC] came to the conclusion that the matters relied upon under s6 were wider and went further than those that had been considered by . . the convicting court under s2 . . He said at p12 of his judgment that ‘It is likely to be only in clear cases which can be said to be on all fours with each other that it might be said that the criminal proceedings have covered all the bases in a way which makes the civil proceedings otiose and oppressive.’
It might be derived from that approach that a proceeding by the Secretary of State under s2 after an order has been made under s2 must necessarily be a proceeding so completely on all fours because both applications must proceed on the basis of the conviction and the facts founding the conviction that the civil proceedings would be, in Mr. Mann’s words ‘otiose and oppressive’. He indeed said . . that he could see how the doctrine of former recovery ‘in its autrefois [convict] form’ might apply if one disqualification under s2 was sought to be followed by another s2 disqualification based on the same facts . . [but] I would not follow his view as formulated for the reasons which I will seek to set out . . [I] note [he] was dealing obiter with a circumstance which differed not only from the case before Mr. Mann but also from the case before me, where of course no disqualification order was in fact made . .
The case which I have to consider differs from [Denis Hilton] in two important particulars. First, the application . . is made under s2, the same section as that under which [the criminal court had power to make a disqualification order] and secondly, as I have held, I am to treat this case as a case where the convicting court did consider the exercise of its discretion.
For the reasons that I have attempted to give, I do not think that there is a distinction to be made between oversight and refusal so far as the failure to impose a disqualification order by the convicting court is concerned . .
it seems to me that a difference between the two sections [sc between a subsequent application under s2 or s6] is a difference which should lead to no distinction as to the appropriate conclusion in regard to abuse of process.
Where the convicting court has not [made a disqualification order], the alternative court, this court, in my judgment clearly has power to do so, and for the reasons which satisfied the judges who considered the similar cases under s6 and s4, no abuse arises.
I take, however, from the words which Mr. Mann used the suggestion that it is, as it appears to me, although it is not [relevant?] for my present decision, at least highly arguable that the exercise of the power is to be by alternative courts, and if one court has exercised the power the other [is] no longer entitled to do so . .’

Judges:

HHJ Rich QC

Citations:

Unreported, 5 Feb 2002

Statutes:

Company Directors Disqualification Act 1986 2

Jurisdiction:

England and Wales

Citing:

Cited – Re Denis Hilton Ltd ChD 2002
A director was prosecuted for the criminal offence of fraudulent trading, and in light of that the Disqualification Unit at the Insolvency Service decided not to pursue its own disqualification application under s6 but to ask the prosecution to seek . .

Cited by:

Criticised – The Secretary of State for Business, Innovation and Skills v Weston and Another ChD 5-Sep-2014
The Secretary of State sought company director disqualification orders against the defendants saying they had been convicted of making false instruments. The Insolvency service had decided against such proceedings, and the Crown Court judge, when . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 24 July 2022; Ref: scu.536466

Lie v Mohile: ChD 11 Nov 2014

The parties had been in partnership as doctors in general practice. The respondent challenged an order made without notice restraining actions which might inhibit the claimant operating his practice. An order dissolving the partnership had already been made.
Held: In the case of a partnership an order for dissolution is the beginning of the end, not the end itself. However, it is in my judgment clear from the terms of the order made on 3 March 2014, extending the injunction, that it was to expire on the making of the order at the trial of the dissolution proceedings. The partnership business was not terminated by the order for dissolution, but continues, albeit for the purpose of winding up the partnership. In practice, a partnership business is often continued after dissolution for the purpose of preserving its goodwill and thus maximising the prospects of a sale. Even without the appeal, and the continued injunction, the licence to attend at the premises continued. It was however appropriate to continue the order.

Judges:

David Richards J

Citations:

[2014] EWHC 3709 (Ch)

Links:

Bailii

Statutes:

Partnership Act 1890 35

Jurisdiction:

England and Wales

Citing:

Cited – Harrison-Broadley v Smith CA 1964
The court has an inherent power to make declarations even though they have not been claimed in the proceedings. In order to give effect to a partnership, the partner who owns the premises on which the partnership business is carried on is taken to . .
Lists of cited by and citing cases may be incomplete.

Health Professions, Company

Updated: 24 July 2022; Ref: scu.538684

In Re A Company (No 007946 of 1993): ChD 18 Nov 1993

A Northern Ireland company can be wound up in England and Wales if its principal place of business had been in England and Wales. The company incorporated in Northern Ireland became insolvent. It sought to strike out the Secretary of State’s petition under 124A, and said it could not apply to a Northern Ireland Company.
Held: The definition of an incorporated company included a company incorporated anywhre in the UK.

Judges:

Morritt J

Citations:

Times 18-Nov-1993, Gazette 02-Mar-1994, [1994] 2 WLR 439

Statutes:

Insolvency Act 1986 124A 220

Jurisdiction:

England and Wales

Insolvency, Company, Northern Ireland

Updated: 24 July 2022; Ref: scu.81640

Payless Cash and Carry Ltd v Patel and Others: ChD 29 Jul 2011

The claimant company, in liquidation, claimed large sums from the first defendant as a director who wrongfully and fraudulently caused it to incur a liability to HMRC for wrongfully claimed input tax on various liquor purchases.
Held: Mann J said: ‘It was no part of the liquidator’s case that there was no trade at all in beer and wine. It was not necessarily part of her case that there was no trade at all with the missing traders. Her case was, whatever trade there may or may not have been, it was not the trade reflected in the disputed input tax claims. There are various possibilities, including different trade with the missing traders at a different level and not involving VAT; trading with other completely different entities, free of VAT, for which the documentary trade with the missing traders is a cover; or no trade at all. There are doubtless other possibilities. The liquidator does not seek to prove any of them. She is entitled to adopt that stance of saying that the purported trade with the missing traders did not take place as documented, and does not have to go further and work out what was actually going on in Payless. As I have observed, in many cases the proof of a fraud will, in practice, require it to be demonstrated what the context of the fraud was – otherwise the fraud is less plausible – but it is not an absolute necessity and in the present case the evidence that the purported trades were not genuine is sufficiently strong that the inability to complete the actual trading picture does not detract from the inferences that are to be drawn from the primary facts as I have found them to be.’

Judges:

Mann J

Citations:

[2011] EWHC 2112 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Revenue and Customs v SED Essex Ltd ChD 14-Jun-2013
Liquidator confirmed despite VAT challege
The Revenue sought the winding up of the company for non-payment of substantial arrears of VAT. The revenue had declined to allow VAT input claims. The company said that the petition was wrong since the debt was genuinely disputed.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency, VAT

Updated: 24 July 2022; Ref: scu.442578

In Re Blackspur Group Plc; Secretary of State v Eastaway: ChD 21 Jun 2001

The director was amongst a group against whom a director disqualification order was sought. He offered an undertaking, but the Secretary of State refused to accept this unless it was accompanied by a statement as to the factual basis on which it was made. The director’s application failed. There was no explicit provision in the Act either way, and it could therefore be said to be ambiguous. Looking at the proceedings in Parliament and the amendments made it was clear that an undertaking was not to be accepted unless the Secretary of State had received evidence to satisfy him as to its need. It was appropriate, accordingly, to accompany the undertaking with a statement which demonstrated compliance with the Act.

Citations:

Gazette 21-Jun-2001, Times 05-Jul-2001, [2001] 1 BCLC 653

Statutes:

Company Directors Disqualification Act 1986 7(2A)

Jurisdiction:

England and Wales

Citing:

See Also – Regina v Secretary of State for Trade and Industry, Ex Parte Eastaway HL 8-Nov-2000
Where the Court of Appeal had refused permission to apply for judicial review after a similar refusal by a judge, that decision was also, by implication, a refusal to grant permission to appeal against the judge’s decision, and there was no scope . .
See Also – Secretary of State for Trade and Industry v Eastaway CA 6-Apr-2001
. .

Cited by:

See Also – Secretary of State for Trade and Industry v Eastaway; Re Blackspur Group (No 3), Secretary of State for Trade and Industry v Davies and Others (No 2) CA 13-Sep-2001
. .
See Also – Eastaway v The United Kingdom ECHR 20-Jul-2004
The applicant had been proceeded against after the collapse of companies in which he was involved with very substantial debts. The proceedings had begun in July 1990, and lasted nearly nine years.
Held: Where proceedings could be expected to . .
See Also – Eastaway v Secretary of State for Trade and Industry and similar ChD 2-Mar-2006
. .
See Also – Eastaway v Secretary of State for Trade and Industry CA 10-May-2007
The applicant had been subject to company director disqualification proceedings. Eventually he gave an undertaking not to act as a company director, but then succeeded at the ECHR in a complaint of delay. He now sought release from his undertaking . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 24 July 2022; Ref: scu.81746

In Re A Company No 004803 of 1996: ChD 2 Dec 1996

T was the company’s bookkeeper. He was also a director but with only a small shareholding. The company fell into difficulties. He recommended economies to the other directors which were not accepted, but then he stayed on in office. The court had disqualified the other directors but not him. The Secretary of State appealed.
Held: The appeal failed. The judge had properly allowed for the relevant factors, including that if his recommendations had been accepted the insolvency might well have been avoided, and that he stood to gain only a limited amount by continuing trading. The judge had found that he had not continued solely to ensure contination of his director’s fees. There was no reason to interfere with his decision.

Judges:

Chadwick J

Citations:

Times 02-Dec-1996

Statutes:

Directors Disqualification Act 1986 6(1)(b)

Jurisdiction:

England and Wales

Company

Updated: 24 July 2022; Ref: scu.81645

Baboo Benee Suhaee and Baboo Madho Suhaee, Children Of Mussummaut Seetul Bahoo, By Their Guardian, Ramchurn Lal v Baboo Hurkishen Doss: PC 8 Feb 1834

(Bengal) The Court of Sudder Dewaany Adawlut of Bengal ought not to affirm a decree of a Provincial Court in a case respecting a balance of partnership accounts without examining the original acccunt books of the firm, if they are tendered in evidence before it, although they were not produced before the Provincial Court.
(Bengal) The Court of Sudder Dewaany Adawlut of Bengal ought not to affirm a decree of a Provincial Court in a case respecting a balance of partnership accounts without examining the original acccunt books of the firm, if they are tendered in evidence before it, although they were not produced before the Provincial Court.

Judges:

Sir Lancelot Shadwell VC

Citations:

[1834] EngR 519, (1834) 2 Knapp 255, (1834) 12 ER 477, [1834] UKPC 6

Links:

Commonlii, Bailii

Jurisdiction:

Commonwealth

Company

Updated: 23 July 2022; Ref: scu.317195

Grender and others v Dresden and others: ChD 13 Feb 2009

Residents on an estate where the estate roads had come into the control of a trust administered by the residents disputed the arrangement necessary to manage the road scheme. Directions were sought for the implementation of a scheme.
Held: Objections based on the lack of a quorum at meetings in the distant past should fail as being far too late. The deed of trust did purport to manage trust assets of value, and had a clear commercial purpose.

Judges:

Norris J

Citations:

[2009] EWHC 214 (Ch), [2009] WTLR 379, [2009] NPC 29

Links:

Bailii

Citing:

Cited – In Re Plymouth Breweries Ltd 1967
In 1893 a scheme of reconstruction which adjusted the rights of the preference and the ordinary shareholders was promoted, and in the following year was approved by the court. But it appeared that the scheme had never been approved by a quorate . .
Lists of cited by and citing cases may be incomplete.

Land, Company

Updated: 23 July 2022; Ref: scu.304537

The Carron Iron Company Proprietors v Maclaren, Dawson, Stainton: PC 23 Jul 1855

If the circumstances of a case are such as would make it the duty of one court in this country to restrain a party from instituting proceedings in another court here, they will also warrant it in imposing on him a similar restraint with regard to proceedings in a foreign court.
The fact of a foreigner having property in this country, enables the Court here to make effectual an injunction issued to him; but, especially in the case of a foreigner who seeks no assistance from the courts here, the issuing of such injunction ought clearly to be shown to be required as conducive to justice.

Judges:

Lord Cranworth LC

Citations:

[1855] EngR 700, (1855) 5 HLC 416, (1855) 10 ER 961, (1855) HL Cas 416, [1855] UKPC 1

Links:

Commonlii, Bailii

Cited by:

Cited – In re Nortel Companies and Others SC 24-Jul-2013
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
Held: Liabilities which arose from financial support directions or contribution notices . .
Lists of cited by and citing cases may be incomplete.

Commonwealth, Company, Jurisdiction

Updated: 23 July 2022; Ref: scu.292622

Thames Valley Housing Association Ltd and Another v Elegant (Guernsey) Ltd and Others: ChD 24 May 2011

Solicitors who had acted for the defendants had undertaken to discharge a mortgage on the defendants’ land, and had had, through its insurers to pay the money themselves. They now sought repayment by the defendant’s de jure director and guiding mind. The defendant itself was in insolvent liquidation.

Judges:

Lewison J

Citations:

[2011] EWHC 1288 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Company

Updated: 22 July 2022; Ref: scu.440141

Lydiatt and Others, On The Behalf of The Hospital of Felstead In Essex v Sir John Foach: 5 Feb 1700

A Corporation for a charity, are but trustees for the charity, and may improve, but cannot do any thing to the prejudice of the charity, or in breach of the rules of the founder.

Citations:

[1700] EngR 53, (1700) 2 Vern 410, (1700) 23 ER 864

Links:

Commonlii

Jurisdiction:

England and Wales

Charity, Company

Updated: 22 July 2022; Ref: scu.392464

X v United Kingdom: ECHR 19 Jan 1998

The complainant said that the system under which he had been declared unfit to be involved in the management of an insurance company was unfair.

Citations:

28530/95, [1998] ECHR 117, (1998) 25 EHRR CD88, 25 EHRR CD88

Links:

Bailii

Statutes:

European Convention on Human Rights

Jurisdiction:

Human Rights

Cited by:

Cited – Wright and Others, Regina (on the Application of) v Secretary of State for Health and Another HL 21-Jan-2009
The claimants had been provisionally listed as ‘people considered unsuitable to work with vulnerable adults’ which meant that they could no longer work, but they said they were given no effective and speedy opportunity to object to the listing. . .
Cited – Heald and Others v London Borough of Brent CA 20-Aug-2009
The court considered whether it was lawful for a local authority to outsource the decision making on homelessness reviews. The appellants said that it could not be contracted out, and that the agent employed lacked the necessary independence and was . .
Lists of cited by and citing cases may be incomplete.

Human Rights, Company, Insurance

Updated: 22 July 2022; Ref: scu.280485

Tarn Insurance Services Ltd v Kirby and others: CA 27 Jan 2009

Claim by company in administration against former directors for excess payments alleged to have been taken by them. There was now alleged a wilful failure to comply wih court orders for disclosure..
Held: Once non-compliance with an unless order was established, what is required in order to grant relief from sanctions is a material change in circumstances: ‘to relieve someone against such a default was sending ‘entirely the wrong message to those who face allegations of fraud’, and ‘In a case of deliberate and persistent non-compliance with orders to provide information and deliver documents made in order to safeguard proprietary claims, a proper administration of justice requires that, save in very exceptional circumstances, sanctions imposed should take effect. There were no exceptional circumstances in the present case.’

Judges:

Waller LJ VP, Thomas LJ, Sir John Chadwick

Citations:

[2009] EWCA Civ 19, [2009] CP Rep 22

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Applied – Thevarajah 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 . .
Cited – Thevarajah 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. . .
Cited – Thevarajah 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 . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Litigation Practice, Torts – Other

Updated: 22 July 2022; Ref: scu.280416

Neilson v Stewart: HL 21 Mar 1991

The parties disputed whether a completed agreement existed between them.
Held: Lord Jauncey of Tullichettle said: ‘The fact that in the usual case a particular term will be considered essential to the existence of a concluded agreement does not prevent parties from contracting in a peculiar case that it shall not be essential.’

Judges:

Lord Jauncey of Tullichettle

Citations:

[1991] UKHL 13, 1991 SC (HL) 22, 1991 SLT 523, [1991] BCC 713

Links:

Bailii

Cited by:

Cited – Avintair v Ryder Airline Services Ltd SCS 30-Dec-1993
The pursuers asserted a contract between themselves and the defenders for a consultancy, and that reasonable remuneration was due under it. The Lord Ordinary had found that no contract had been completed, the parties being, at all points, in dispute . .
Lists of cited by and citing cases may be incomplete.

Scotland, Contract, Company

Updated: 22 July 2022; Ref: scu.279763

Fanmailuk.Com Ltd and Another v Cooper and others: ChD 11 Jun 2008

Claim for a declaration that the entire share capital was held on trust for the claimant.
Held: Engelhart QC said: ‘on an application under section 261 it would be ‘quite wrong . . to embark on anything like a mini-trial of the action’

Judges:

Engelhart QC HHJ

Citations:

[2008] EWHC 2198 (Ch), [2008] BCC 877

Links:

Bailii

Statutes:

Companies Act 2006 261

Jurisdiction:

England and Wales

Cited by:

Cited – Cooper and Others v Fanmailuk.Com Ltd and Another CA 17-Dec-2009
F claimed to be the beneficial owner of shares registered in the names of the claimants. The appellants challenged a finding that the shares were held on trust for F, and the implication that the first appellant had presented a dishonest claim.
Cited – Iesini and Others v Westrip Holdings Ltd and Others ChD 16-Oct-2009
The claimants were shareholders in Westrip, accusing the Defendant directors of deliberately engaging in a course of conduct which has led to Westrip losing ownership and control of a very valuable mining licence and which, but for their . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 21 July 2022; Ref: scu.276667

The Morgan Crucible Company Plc v Hill Samuel and Co Ltd and others: CA 19 Oct 1990

Appeal from refusal of leave to amend statement of claim.

Judges:

Slade, Mustill, Nicholls LJJ

Citations:

[1990] EWCA Civ 4, [1991] Ch 259

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Appeal from – Morgan Crucible Company Plc v Hill Samuel and Co Ltd ChD 24-Jul-1990
The court laid down the procedure on a strike out application: ‘On an application to strike out a pleading under RSC Ord.18, r.19(1)(a) no evidence is admissible and since it is only the pleading itself which is being examined, the court is required . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company

Updated: 21 July 2022; Ref: scu.248041

Comax Secure Business Services Ltd v Wilson: 21 Jun 2001

Mr Wilson (who appeared in person) was held liable to account for profits received by a company called Nemesis Ltd, which he controlled. The dishonest assistant was himself in a position to receive the profit personally, which he chose not to receive, but diverted elsewhere. He was liable as a dishonest assistant: ‘Mr Wilson submitted that neither he nor Mr Coker had personally received any part of the profit in relation to transactions 17 and 18. He submitted that therefore they should not be held liable to account for those profits. He made the same submission in relation to the profit made on transactions 19 and 20. So far as transactions 17 and 18 are concerned, the submission misses the point. As a result of the breach by Mr Coker of his fiduciary duty owed to Comax, in which breach Mr Wilson knowingly assisted, they were in a position to receive the proceeds of the sales to Lombard in respect of transactions 17 and 18. They chose so to arrange their affairs, that they did not receive those proceeds themselves, but those proceeds were received first by Copease UK Ltd and then, as to the vast majority, by Nemesis. They cannot by so arranging their affairs avoid the liability which otherwise rests upon them.’

Judges:

HH Judge Seymour QC

Citations:

Unreported 21 June 2001

Jurisdiction:

England and Wales

Cited by:

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

Company

Updated: 21 July 2022; Ref: scu.230348

Jarvis Plc and Others v Pricewaterhousecoopers: ChD 13 Jul 2000

A company’s auditors resigned, and issued a notice detailing circumstances which they thought should be brought to the attention of the shareholders. The claimants issued proceedings, claiming the notice merely sought to bring attention to defamatory matter. They discontinued, and the defendants applied for an order that the contents of the notice be distributed to the persons interested. The order was made. There was no need for a declaration that the purpose of the original notice had not been to seek publicity as alleged.

Citations:

Gazette 03-Aug-2000, [2000] EWHC Ch 78

Links:

Bailii

Jurisdiction:

England and Wales

Company, Defamation

Updated: 21 July 2022; Ref: scu.162994

Kluk v Secretary Of State for Business, Enterprise and Regulatory Reform: ChD 20 Dec 2007

Judges:

Sir Andrew Park

Citations:

[2007] EWHC 3055 (Ch), [2008] 2 BCLC 313

Links:

Bailii

Statutes:

Company Directors Disqualification Act 1986 17

Jurisdiction:

England and Wales

Citing:

Cited – In Re Carecraft Construction Co Ltd ChD 13-Oct-1993
A court must hear evidence before disqualifying directors. Though the Director and the Secretary of State might reach an agreement as to what should happen, they could not displace the court in deciding what order should be made, and in making that . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 21 July 2022; Ref: scu.346774

Hough and others v Hardcastle and others: ComC 22 Apr 2005

Application under CPR 3.4 and 24.2 for orders striking out or dismissing a petition under section 459 of the Companies Act 1985 because it discloses no grounds on which the petition has any real prospect of success. The petition alleges, as it has to in order to come within section 459, that the affairs of Grandactual Limited (‘the Company’) are being and have been conducted by the first to third respondents to the petition in a manner which has been unfairly prejudicial to the interests of the petitioners as shareholders.

Citations:

[2005] EWHC 1415 (Comm)

Links:

Bailii

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Company

Updated: 21 July 2022; Ref: scu.279047

Fanmailuk.Com Ltd and Another v Cooper and others: ChD 17 Dec 2008

A declaration was sought as to the beneficial ownership of some shares.

Judges:

Sales J

Citations:

[2008] EWHC 3131 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Appeal from – Cooper and Others v Fanmailuk.Com Ltd and Another CA 17-Dec-2009
F claimed to be the beneficial owner of shares registered in the names of the claimants. The appellants challenged a finding that the shares were held on trust for F, and the implication that the first appellant had presented a dishonest claim.
Lists of cited by and citing cases may be incomplete.

Company

Updated: 21 July 2022; Ref: scu.278848

Luxe Holding Ltd v Midland Resources Holding Ltd: ChD 23 Jul 2010

Midland agreed to sell to Luxe shares in 20 companies, 17 of which were incorporated in Russia or the Ukraine, with the lex situs of the shares in them being also there. Midland defaulted, sold the shares in the Russian and Ukrainian companies elsewhere and, when sued by Luxe, argued that, since Russian and Ukrainian law did not recognise the concept of a beneficial interest at all, and since ‘questions of ownership and therefore proprietary interests in shares are governed by the lex situs of the companies’, it followed that ‘whatever might have been the position if these had been shares in English companies, there were no beneficial interests in the shares which could pass to Luxe’ under the share sale agreement.
Held: Roth J noted that the ‘sort of trust, and thus beneficial interest’ which arises on the sale of land or of shares in private companies, ‘arises only because the agreement is specifically enforceable’ and is ‘In a sense, therefore, … the corollary of the remedy of specific performance’ and ‘is not a full trust in the classic sense’
After referring to Lake v Bayliss, Roth J analysed the law: ‘ Is the application of these principles precluded by the fact that the property is held through subsidiaries in a country the law of which does not recognise the concept of a lesser proprietary interest or that it does not recognise a beneficial interest at all? The fact that Midland held the shares through subsidiaries does not in itself preclude the sale and purchase agreement from being specifically enforceable, as Midland for present purposes accepts. The obligation to be enforced would be that Midland must procure that the shares are transferred. I do not see that this in itself would prevent the qualified trust relationship from arising.
Does the applicability of the lex situs to questions of ownership alter the position as between the contracting parties? It is trite but nonetheless important to recall that equity acts in personam. The parties here have chosen to govern the relationship as between themselves according to English law. Unless precluded by authority, it seems to me that as a matter of principle where the parties have expressly chosen English law and the exclusive jurisdiction of the English court, they have voluntarily subjected themselves to the English system of remedies. In my judgment, it is at the very least well arguable, and if necessary I would hold, that this includes the ‘qualified trusteeship’ that applies as the corollary in such a case to the availability of specific performance, unless that gave rise to a situation that was directly contrary to the lex situs in the sense of interfering with the operation of the local law.’
And: ‘I do not consider that the reasoning in Lightning is confined to the particular case of a resulting trust. On the contrary, it seems to me of general application. And the observation made by Millett LJ resonates in the present case, since three of the 20 companies of which Midland sold its shareholding were Guernsey or Irish companies, for which as I apprehend the lex situs recognises a beneficial interest. As it happens, those companies are of negligible value, but that obviously cannot affect the principle. If Midland’s analysis were correct, the English court would find that Luxe had acquired as against Midland a beneficial interest in those shares but not in the shares of the other companies incorporated under a different system of law, and that it would thus have a very limited proprietary claim.
Moreover, it is accepted by Luxe that any beneficial interest in the shares sold to Troika was destroyed or terminated by that sale. Its claim is to the proceeds in Midland’s hands. Thus no interference with property transfers under Ukrainian (or Russian) law is involved. There is no reason why equity, acting on the conscience of Midland as a proper defendant to English proceedings, cannot require that Midland holds those moneys for the benefit of Luxe.’

Judges:

Roth J

Citations:

[2010] EWHC 1908 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Orr Ewing v John Orr Ewing and Co and Orr Ewing’s Trustees HL 5-Dec-1882
A contract of copartnery provided that in the event of the death of any of the partners the surviving and solvent partners who should continue the business should pay out to the representatives of the deceased the amount at his credit in the books . .
Cited – Deschamps v Miller 1908
The parties disputed land in India. A French couple, had married in France in community of property. So according to the French marriage contract the wife was supposed to be entitled to one half of the husband’s after-acquired property. The husband . .
Cited – Lake v Bayliss 1974
As to the sale of land: ‘ It is by reason of this trusteeship that the vendor who breaks his contract of sale by reselling to someone else has been held to be accountable to the first intended purchaser for the proceeds of sale.’ . .
Cited – Lightning v Lightning Electrical Contractors Ltd CA 1998
Mr K asserted beneficial ownership under a resulting trust over land in Scotland bought by an English company to which he had advanced the purchase price. Scots law, the lex situs of the land, did not recognise any equitable interest. The company . .

Cited by:

Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.

Company, Trusts

Updated: 19 July 2022; Ref: scu.421057

Secretary of State for Business Enterprise and Regulatory Reform v Aaron and others: CA 16 Oct 2008

In asking a court to order the disqualification of a company director, the Secretary of State may call in evidence findings of the Financial Services Authority as to misconduct, but no those of the Financial Services Ombudsman. The rule in Hollington applied to such proceedings. Hearsay evidence would have been admissible before the Ombudsman.

Judges:

Buxton LJ, Keene LJ, Thomas LJ

Citations:

[2008] EWCA Civ 1146, Times 10-Nov-2008, [2009] Lloyd’s Rep FC 1, [2009] 1 BCLC 55, [2009] Bus LR 809, [2009] BCC 375, [2009] CP Rep 10

Links:

Bailii

Statutes:

Company Directors Disqualification Act 1986 7

Jurisdiction:

England and Wales

Citing:

Cited – Hollington v F Hewthorne and Co Limited CA 1943
The defendant had been involved in a road accident in which the plaintiff’s son had died, and had been convicted of careless driving. The plaintiff as the personal representative of his son sued for damages for negligence, seeking to rely on the . .
Lists of cited by and citing cases may be incomplete.

Company, Evidence

Updated: 19 July 2022; Ref: scu.276944

AIB Capital Markets Plc and Another v Atlantic Computer Systems Plc and others; in re Atlantic Computers: CA 25 Jul 1990

The court was asked how the administrators should deal with third parties seeking to exercise existing proprietary rights (including security rights) against the company in administration, and gave guidance. Nicholls LJ noted that in some cases there would be a dispute over the existence, validity or nature of the security which the third party was seeking to enforce. In that context, it was not for the court (on the application for permission to lift the moratorium) to seek to adjudicate upon that issue ‘unless . . the issue raises a short point of law’. Otherwise (i.e. wherever the issue about the validity or nature of the security did not raise a short point of law) the Court would need to be satisfied only that the applicant for permission to enforce the proprietary right had a seriously arguable case.

Judges:

Neill, Staughton, Nicholls LJJ

Citations:

[1990] EWCA Civ 20, [1992] Ch 505, [1990] BCC 859, [1992] 2 WLR 367

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – McCartney and Unite The Union and Another v Nortel Networks UK Ltd (In Administration) ChD 22-Apr-2010
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 19 July 2022; Ref: scu.276299

O’Donnell v Shanahan and others; In re Allied Business and Financial Consultants Ltd: ChD 7 Aug 2008

Judges:

Richard Sheldon QC

Citations:

[2008] EWHC 1973 (Ch), [2009] 1 BCLC 328

Links:

Bailii

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Cited by:

Appeal from – O’Donnell v Shanahan and Another CA 22-Jul-2009
The claimant appealed against dismissal of her petition for an order for the defendants to purchase her shares at a fair value, saying that they had acted unfairly toward her. Her co-directors had acquired, for another company of which they were . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 19 July 2022; Ref: scu.272885

In Re Maxwell Fleet and Facilities Management Ltd: ChD 10 Feb 2000

Although regulation 4 went beyond the obligations imposed by the Directive, it was intended to protect employee rights who were employed by companies which were hived down. In this case the sale of the business to a subsidiary and then onto a third party was to be treated as one transaction, and the regulations applied.

Citations:

Gazette 10-Feb-2000, Times 23-Feb-2000

Statutes:

Transfer of Undertakings (Protection of Employment) Regulations 1981 (1981 No 1794)

Jurisdiction:

England and Wales

Insolvency, Employment, Company

Updated: 19 July 2022; Ref: scu.82050

In Re Migration Services International Ltd: ChD 2 Dec 1999

When considering whether to impose a disqualification order upon a company director, it was relevant to consider the unlawful and unauthorised use of the name of a liquidated company. The sections of the Insolvency Act which might be taken into account were not exhaustively listed.

Citations:

Times 02-Dec-1999, Gazette 08-Dec-1999

Statutes:

Company Directors Disqualification Act 1986, Insolvency Act 1986

Jurisdiction:

England and Wales

Company

Updated: 19 July 2022; Ref: scu.82062

Re BSB Holdings Ltd; London Merchant Securities Plc v Chargeurs Sa and Others: ChD 2 Aug 1995

Protection of minority shareholders was not to be used to impede the proper management of a company’s affairs. Directors must act in the company’s overall best interests despite prejudice to one class of shareholders.
Arden J said: ‘However, in my judgment, it is not the effect of Re Saul D Harrison and Sons plc that a remedy under section 459 can be given only if the directors have acted in breach of duty or if the company has breached the terms of its articles or some other relevant agreement. These matters constitute in most cases the basis for deciding what conduct is unfair. But the words of the section are wide and general and, save where the circumstances are governed by the judgments in Re Saul D Harrison and Sons plc, the categories of unfair prejudice are not closed. The standards of corporate behaviour recognised through section 459 may in an appropriate case thus not be limited to those imposed by enactment or existing case law.’

Judges:

Arden J

Citations:

Times 02-Aug-1995, Independent 07-Sep-1995

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Citing:

Cited – In 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 . .

Cited by:

See Also – Re BSB Holdings Ltd (No 2) ChD 1996
Arden J considered a submission that there could be no breach of duty by the directors unless the substantial purpose of their acts was to discriminate improperly against a group of shareholders. In rejecting that submission she commented as . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 19 July 2022; Ref: scu.81761

In Re Kudos Glass Ltd (In Liquidation): ChD 30 Nov 2000

The identity of the petitioner was crucial in determining whether a company voluntary arrangement had been determined, and its trusts discharged by a winding up order. The company’s voluntary arrangement would be determined on the winding up order where the petitioning creditor supervised the arrangement or a creditor bound by the arrangement or, if the petition creditor was not a party, where the supervisor was obliged to bring the petition himself but had failed to do so. It all depends upon the circumstances, the terms of the scheme, and the conduct of the bound creditors. Insolvency legislation would decide what was implied as to the state of the trusts.

Citations:

Times 30-Nov-2000, Gazette 18-Jan-2001

Jurisdiction:

England and Wales

Company, Insolvency

Updated: 19 July 2022; Ref: scu.81979

In Re Little Olympian Eachways Ltd: ChD 29 Jul 1994

A Jersey company (Supreme) had brought a petition under the section against the company. An application was made for security for costs against Supreme. It could only be made if Supreme was resident outside the UK. Supreme argued that, despite being a Jersey company, it was resident in the United Kingdom, and that therefore the order could not be made against it.
Held: It was resident in Jersey and the court made the order. The board members were partners in a firm of Jersey advocates. It was run from the offices of that firm. Its only asset was a holding of shares in Little Olympian Each Ways Ltd. An individual who lived in England, Mr Lemos, said that he provided central management and control of Supreme, but he gave no details, and the judge was unimpressed. A letter from one of the Jersey advocates who were directors said that if Mr Lemos was ever to give instructions to them directly he (the Jersey advocate/director) would act in accordance with them provided that he was satisfied that they were consistent with Jersey company law and with the interests of the two persons who were understood to be interested in the share capital. The court referred to ‘the shadowy nature’ of Supreme, but held it to be resident in Jersey.
The ordinary residence of company for the purposes of RSC Ord. 23 is with the central management and control.

Judges:

Lindsay J

Citations:

Times 29-Jul-1994, Ind Summary 03-Oct-1994, [1995] 1 WLR 560, [1994] 2 BCLC 420

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Cited by:

Cited – Wood v Holden (Inspector of Taxes) ChD 8-Apr-2005
The parties had entered into complex share transactions for the sale of their trading business, and sought to avoid liability for capital gains tax.
Held: Gains on disposals between members of a non-resident group of companies were exempt. The . .
Cited – Iesini and Others v Westrip Holdings Ltd and Others ChD 16-Oct-2009
The claimants were shareholders in Westrip, accusing the Defendant directors of deliberately engaging in a course of conduct which has led to Westrip losing ownership and control of a very valuable mining licence and which, but for their . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company

Updated: 19 July 2022; Ref: scu.82005

In Re Living Images Ltd: ChD 7 Aug 1995

Director must have intended fraudulent preference for creditor to be disqualified. Trading whilst insolvent amounts to trading with creditors’ money.

Citations:

Times 07-Aug-1995, [1996] 1 BCLC 348

Jurisdiction:

England and Wales

Cited by:

Cited – The Secretary of State for Trade and Industry v Goldberg, Mcavoy ChD 26-Nov-2003
The Secretary of State sought a disqualification order. The director argued that one shoul not be made in the absence of some breach of legal duty, some dishonesty should be shown.
Held: The answer was a mixture of fact and law. A breach of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 19 July 2022; Ref: scu.82006

In Re Joseph Holt Plc; Winpar Holdings Ltd v Joseph Holt Group Plc: ChD 15 Nov 2000

An offer was made to purchase the entire share capital of a company, but the documents were not served on shareholders in certain foreign countries because of difficulties in complying with regulatory provisions. Having received acceptance from more than 90 per cent of shareholders, the company sent to all remaining shareholders notices requiring the sale of the their shareholdings. Some objected that the second notices were invalid since they had not had served on them the original notices. Held the notices were upheld. They related to the offer as a whole, not to service of the offer, and that offer could not fail because of a failure to serve notice on a few shareholders.

Citations:

Times 15-Nov-2000, Gazette 16-Nov-2000

Statutes:

Companies Act 1985 428

Jurisdiction:

England and Wales

Cited by:

Appeal from – Winpar Holdings Ltd v Joseph Holt Group plc CA 24-May-2001
An offer was made to purchase the entire share capital of a company, but the offer allowed for different arrangements for service on shareholders in certain foreign countries because of difficulties in complying with local regulatory provisions. The . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 19 July 2022; Ref: scu.81966

Re Mal Bower’s Macquarie Electrical Centre Pty Ltd (in liquidation): 1974

The liquidator made a claim against the bank for the amount of the Payments had been made out of the company’s bank account between the date of the petition and the date of the order and the date when the account was subsequently closed.
Held: The claim was dismissed.
Street CJ considered there was ‘great force in the argument that ‘the paying by a bank of a company’s cheque, presented by a stranger, does not involve the bank in a disposition of the property of the company so as to disentitle the bank to debit the amount of the cheque to the company’s account. The word ‘disposition ‘ connotes in my view both a disponor and a disponee. The section operates to render the disposition void so far as it concerns the disponee. It does not operate to affect the agencies interposing between the company, as disponor, and the recipient of the property, as disponee . . The intermediary functions fulfilled by the bank in respect of paying cheques drawn by a company in favour of and presented on behalf of a third party do not implicate the bank in the consequences of the statutory avoidance prescribed by s. 227 . . I consider that the legislative intention . . is such as to require an investigation of what happened to the property, that is to say what was the disposition, and then to enable the liquidator to recover it upon the basis that the disposition was void. It is recovery from the disponee that forms the basic legislative purpose of s. 227’

Judges:

Street CJ

Citations:

[1974] 1 NSWLR 254

Jurisdiction:

Australia

Cited by:

Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 18 July 2022; Ref: scu.640394

In re J Leslie Engineers Co Ltd: 1976

The director of a company between presentation of a petition to wind up and the making of the order paid over pounds 1050 to a creditor for work done. Of this sum, pounds 800 was paid by way of a cheque drawn on the personal account of the director and his wife, which was in fact overdrawn at the time. The director caused the Company to pay pounds 800 into the joint account to reimburse them for the sum paid to the creditor.
Held: The payment of pounds 800 from the Company to the joint account was a disposition of the Company’s property and accordingly void, but the payment out of the joint account to the creditor was not a disposition of the Company’s property and therefore was not void. The creditor therefore was not liable in respect of that sum to the Company. The invalidating provisions in section 227 do not spell out the appropriate remedy of the company when the disposition is avoided: ‘Now, it must be remembered that the invalidation of a disposition of the company’s property and the recovery of the property disposed of, are two logically distinct matters. Section 227 says nothing about recovery; it merely avoids dispositions . . What is the appropriate remedy in respect of the invalidated disposition is a matter not regulated by the statute and that has to be determined by the general law.’
Section 227 did not mean that the company had some special remedy which enabled it to proceed with a claim in circumstances where, had the disposition been invalid on some other ground than the section, no such remedy would have lain.

Judges:

Oliver J

Citations:

[1976] 1 WLR 292

Statutes:

Companies Act 1948 227

Jurisdiction:

England and Wales

Cited by:

Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 18 July 2022; Ref: scu.640393

Lake v Bayliss: 1974

As to the sale of land: ‘ It is by reason of this trusteeship that the vendor who breaks his contract of sale by reselling to someone else has been held to be accountable to the first intended purchaser for the proceeds of sale.’

Citations:

[1974] 1 WLR 1073

Jurisdiction:

England and Wales

Cited by:

Cited – Luxe Holding Ltd v Midland Resources Holding Ltd ChD 23-Jul-2010
Midland agreed to sell to Luxe shares in 20 companies, 17 of which were incorporated in Russia or the Ukraine, with the lex situs of the shares in them being also there. Midland defaulted, sold the shares in the Russian and Ukrainian companies . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.

Company, Trusts

Updated: 18 July 2022; Ref: scu.640392

Orr Ewing v John Orr Ewing and Co and Orr Ewing’s Trustees: HL 5 Dec 1882

A contract of copartnery provided that in the event of the death of any of the partners the surviving and solvent partners who should continue the business should pay out to the representatives of the deceased the amount at his credit in the books of the firm, by ten biennial instalments, ‘with interest thereon at the rate of 5 per cent. per annum from the date of the balance.’ Held (aff. decision of Second Division, diss. Lord Watson) that at each payment interest must be paid upon the whole balance of the debt then remaining unpaid, and not upon the instalment.
Earl of Selborne LC said: ‘The Courts of Equity in England are, and have always been, courts of conscience, operating in personam and not in rem; and in the exercise of this personal jurisdiction they have always been accustomed to compel the performance of contracts and trusts as to subjects which were not either locally or ratione domicilii within their jurisdiction. They have done so as to land, in Scotland, in Ireland, in the Colonies, in foreign countries . .’

Judges:

Lord Blackburn, Earl of Selborne LC

Citations:

[1882] UKHL 240 – 1, 20 SLR 240 – 1

Links:

Bailii

Jurisdiction:

Scotland

Cited by:

Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Cited – Luxe Holding Ltd v Midland Resources Holding Ltd ChD 23-Jul-2010
Midland agreed to sell to Luxe shares in 20 companies, 17 of which were incorporated in Russia or the Ukraine, with the lex situs of the shares in them being also there. Midland defaulted, sold the shares in the Russian and Ukrainian companies . .
Lists of cited by and citing cases may be incomplete.

Company, Equity

Updated: 18 July 2022; Ref: scu.637748

Re Astec (BSR) Plc: ChD 1999

Jonathan Parker J said: ‘The concept of ‘legitimate expectation’ . . can have no place in the context of public listed companies . . Its introduction in that context would, as it seems to me, in all probability prove to be a recipe for chaos. If the market in a company’s shares is to have any credibility, members of the public dealing in that market must it seems to me be entitled to proceed on the footing that the constitution of the company is as it appears in the company’s public documents, unaffected by any extraneous equitable considerations and constraints.’

Judges:

Jonathan Parker J

Citations:

[1999] BCC 59

Jurisdiction:

England and Wales

Cited by:

Cited – Eckerle and Others v Wickeder Westfalenstahl Gmbh and Another ChD 23-Jan-2013
By acting together, two shareholders had first refused the proposed dividend, and replaced the board. They then acquired fiurther shares and achieved a majority of more than 75%, sufficient to pass a special resolution, and proposed the cancellation . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 18 July 2022; Ref: scu.470579

In Re Dennis Hilton Ltd: ChD 4 Jul 2001

A director of a failed company had been prosecuted for matters relating to the failure. The criminal court had had power to impose a disqualification order but did not do so. The Secretary of State subsequently applied for a civil disqualification, and the respondent argued that, given the view taken by the criminal court, this was an abuse of process. The court held that the exercise of the power was ostensibly proper, and a court should be slow to intervene. The section clearly anticipated an application being made in the light of criminal proceedings, and the failure to make an application whilst the criminal proceedings remained outstanding could not be read as an intention to abandon applying for a disqualification order.

Citations:

Times 04-Jul-2001

Statutes:

Company Directors Disqualification Act 1986 4

Jurisdiction:

England and Wales

Company

Updated: 18 July 2022; Ref: scu.81845

Hurndell v Hozier and Another: ChD 19 Mar 2008

Judges:

David Richards J

Citations:

[2008] EWHC 538 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Appeal from – 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 . .
See Also – Hurndell v Hurndell and Others ChD 17-Dec-2010
. .
See Also – Hurndell v Hozier and Others ChD 18-Feb-2011
. .
Lists of cited by and citing cases may be incomplete.

Company, Torts – Other

Updated: 18 July 2022; Ref: scu.270952

Burnden Holdings (UK) Ltd v Fielding and Another: ChD 5 Sep 2014

The company sought to recover from the defendants, two former directors.
Held: The claim was statute barred.
Hodge QC dealt with the claimant’s reliance on section 32: ‘That leaves the claimant’s reliance upon section 32. There the difficulties that the claimant faces are that there are no facts sufficiently asserted to give rise, in my judgment, to any realistic prospect of relying upon either limb of section 32 of the 1980 Act. Given the knowledge and involvement on the part, in particular of the company’s auditors, I fail to see how it can be asserted either (1) that there was any deliberate commission of a breach of duty on the part of the defendants; or (2) that there had been any deliberate concealment from the claimant company of facts relevant to the claimant’s alleged right of action. I am afraid, from Mr Latimer’s point of view, that I just do not see how the claimant company can begin to get home in relation to either of those matters. In view of the involvement of the accountants and solicitors, there is no realistic prospect of establishing either the deliberate commission of a breach of duty or the deliberate concealment of any fact relevant to the claimant’s right of action.’

Judges:

Hodge QC HHJ

Citations:

[2014] EWHC 3356 (Ch)

Links:

Bailii

Statutes:

Companies Act 2006, Limitation Act 1980 2(1)(b) 32

Jurisdiction:

England and Wales

Cited by:

Appeal from – Burnden Holdings (UK) Ltd v Fielding and Another CA 17-Jun-2016
The company, now in liquidation sought to claim for the alledged misapplication by former directors of its funds in 2007. It now appealed against a summary rejection of its claim as time barred.
Held: The appeal succeeded. Section 21(1)(b) . .
Lists of cited by and citing cases may be incomplete.

Company, Trusts, Limitation

Updated: 18 July 2022; Ref: scu.538050

In Re Continental Assurance Co of London Plc: ChD 2 Jul 1996

Gross incompetence as director in not reading the company accounts founded disqualification. The jurisdiction of company director disqualification should not be hedged about with rigid rules which would allow directors to navigate around disqualification applications by taking fine points on the way in which the affidavits have formulated.

Citations:

Gazette 24-Jul-1996, Times 02-Jul-1996, [1997] 1 BCLC 48

Statutes:

Company Directors Disqualification Act 1986 6

Jurisdiction:

England and Wales

Cited by:

Cited – The Secretary of State for Trade and Industry v Swan and Othes ChD 22-Jul-2003
When commencing proceedings under the Act, the papers were defective. The secretary of state had failed to give appropriate notice, and thus prevented him from making representations as to the allegations. The allegations involved the manipulation . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 18 July 2022; Ref: scu.81815

In Re Britannia Homes Centres Ltd and the Company Directors Disqualification Act 1986; Official Receiver v McCahill: ChD 27 Jun 2000

An appeal against an order disqualifying the director of a company in an application for leave to act as a director should be made to the High Court. Where the application was so as to allow the director to act on a company in the course of winding up proceedings, the court to which the application should be made was that hearing the winding up proceedings.

Citations:

Times 27-Jun-2000, Gazette 29-Jun-2000

Statutes:

Company Directors Disqualification Act 1986

Jurisdiction:

England and Wales

Company

Updated: 18 July 2022; Ref: scu.81757

In Re Eurofinance Group Ltd: ChD 6 Jul 2000

Where a quasi-partnership had been created with the expectation that a party would be involved in the management of the business, it was a breach of his right to exclude him. This was a consequence of the restraint imposed by equity on relations between majority and minority partners, and not the cause of it. Because the continuing partners would continue the business, the share of the partner ordered to be purchased, should be valued as a going concern.

Citations:

Times 04-Jul-2000, Gazette 06-Jul-2000

Jurisdiction:

England and Wales

Equity, Company

Updated: 18 July 2022; Ref: scu.81869

El 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: The company was fixed with the knowledge of its part-time chairman and a non-executive director, because he had acted as its directing mind and will for the particular purpose of arranging its receipt of the tainted funds. It was sufficient that the director had management and control so far as the receipt of the fraud was concerned, having made arrangements for the receipt and disposal of the money, even though he had no general managerial responsibility in the company.
Hoffmann LJ set out the ingredients of knowing receipt: ‘For this purpose the plaintiff must show, first a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets are traceable to a breach of fiduciary duty.’
When asking who was the controlling mind of a company, the relevant test is to find the person who had management and control in relation to the act or omission in point. The formal position or status as a director is relevant but not decisive. A ‘pragmatic’ approach is necessary: ‘Decided cases show that, in regard to the requisite status and authority, the formal position, as regulated by the company’s articles of association, service contracts and so forth, though highly relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view he was right to do so, although it has led me, with diffidence, to a conclusion different from his own’ and ‘ . . different persons may for different purposes satisfy the requirements of being the company’s directing mind and will. ‘ The court considered the ingredients of the tort of ‘knowing receipt’: ‘For this purpose the plaintiff must show, first, a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets he received are traceable to a breach of fiduciary duty.’ (Hoffmann LJ)
Nourse LJ said: ‘The doctrine attributes to the company the mind and will of the natural person or persons who manage and control its actions. At that point, in the words of Millett J ([1993] 3 ALL ER 717 at 740): ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’ It is important to emphasise that management and control is not something to be considered generally or in the round. It is necessary to identify the natural person or persons having management and control in relation to the act or omission in point. This was well put by Eveleigh J in . . R v Andrews Weatherfoil Ltd . .
Decided cases show that, in regard to the requisite status and authority, the formal position, as regulated by the company’s articles of association, service contracts and so forth, though highly relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view he was right to do so, although it has led me, with diffidence, to a conclusion different from his own.’

Judges:

Nourse, Rose, Hoffmann LJJ

Citations:

Times 03-Jan-1994, [1994] 2 All ER 685, [1993] EWCA Civ 4, [1994] BCC 143, [1994] 1 BCLC 464

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Appeal from – El Ajou v Dollar Land Holdings Plc and Another ChD 3-Jan-1993
A non active director may still be company’s ‘directing mind’. The doctrine of attributing the actions of individuals to a company is that ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’
Tracing was no . .
Cited – Lennard’s Carrying Company Limited v Asiatic Petroleum Company Limited HL 1915
The House was asked as to when the acts of an individual became those of his employer under section 502 (‘any loss or damage happening without (the ship owner’s) actual fault or privity’).
Held: Viscount Haldane LC said: ‘It must be upon the . .
Cited – Regina v Andrews-Weatherfoil Ltd CACD 1972
For so long as it is possible for persons concerned in a single offence to be tried separately, it is inevitable that the verdicts returned by the two juries will on occasion appear to be inconsistent with one another. Eveleigh J: ‘It is necessary . .

Cited by:

Applied – Bank of Credit and Commerce International (Overseas) Ltd and Another v Akindele CA 22-Jun-2000
The test of whether a person who received funds held them on constructive trust, was not whether he himself was dishonest, but rather whether he had knowledge of circumstances which made it unconscionable to hold on to the money received. In respect . .
Cited – Crown 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 . .
Cited – Mahonia Limited v JP Morgan Chase Bankwest Lb Ag QBD 3-Aug-2004
The Claimant claimed on a letter of credit issued by the Defendant on behalf of Enron Ltd, who asserted it was not liable to pay there having been unlawful behaviour by Enron Ltd. Swap agreements had been entered into, and the defendant said the . .
Cited – 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 . .
See Also – El Ajou v Dollar Land Holdings Plc ChD 1995
The tracing of assets into the hands of a third party depends upon a notional charge. There are no inflexible rules. The essential elements of ‘knowing receipt’ are: ‘For this purpose the plaintiff must show, first, a disposal of his assets in . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Cited – KR and others v Royal and Sun Alliance Plc CA 3-Nov-2006
The insurer appealed findings of liability under the 1930 Act. Claims had been made for damages for child abuse in a residential home, whom they insured. The home had become insolvent, and the claimants had pursued the insurer.
Held: The . .
Cited – Charter Plc and Another v City Index Ltd and others ChD 12-Oct-2006
An employee of the claimant had fraudulently spent several million pounds of the claimant’s money on personal bets through the defendant company. The claimant said that the defendants knew the origin of the funds and were liable to repay them. . .
Cited – Jetivia 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 . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.

Company, Equity, Torts – Other, Trusts

Updated: 17 July 2022; Ref: scu.262615

Re S A and D Wright Ltd, Denney v John Hudson and Co Ltd: CA 1992

Fox LJ said: ‘A disposition carried out in good faith in the ordinary course of business at a time when the parties were unaware that a petition had been presented would usually be validated by the court unless there is ground for thinking that the transaction may involve an attempt to prefer the disponee – in which case the transaction would not be validated.’
When deciding whether to validate a disposition under section 127, the court ‘must always do its best to ensure that the interests of the unsecured creditors will not be prejudiced’, and, where there is said to have been a benefit in validating, ‘the court must carry out a balancing exercise’.

Judges:

Fox LJ

Citations:

[1992] BCLC 901, [1992] BCC 503

Jurisdiction:

England and Wales

Cited by:

Cited – Rose v AIB Group (UK) plc and Another ChD 9-Jun-2003
The bank had received and paid substantial sums from the company before the petition for insolvency had been presented, and had discharged the director’s charge on his house. The liquidator sought restitution under the Act. The bank replied that it . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.

Equity, Company

Updated: 17 July 2022; Ref: scu.184535

Ayerst (Inspector of Taxes) v C and K (Construction) Ltd: HL 1976

A resolution or order for winding up of a company divests it of the beneficial interest in its assets. They become a fund which the company thereafter holds in trust to discharge its liabilities. Where a company is wound up in this country, its assets are held on terms that they must be applied in accordance with that statutory insolvency regime.
Lord Diplock spoke of the use of the expression ‘trust’ and ‘trust property’ in reference to the assets of a company in liquidation: ‘All that was intended to be conveyed by the use of the expression ‘trust property’ and ‘trust’ in these and subsequent cases (of which the most recent is Pritchard v. M.H. Builders (Wilmslow) Limited [1969] 1 WLR 409) was that the effect of the statute was to give to the property of a company in liquidation that essential characteristic which distinguished trust property from other property, viz., that it could not be used or disposed of by the legal owner for his own benefit, but must be used or disposed of for the benefit of other persons.’
Lord Diplock referred to the legal ownership of property subject to a trust as held by the trustee ‘not for his own benefit but for the benefit of the cestui que trust or beneficiaries’, but went on to say that: ‘Upon the creation of a trust in the strict sense as it was developed by equity the full ownership in the trust property was split into two constituent elements … the ‘legal ownership’ in the trustee, what came to be called the ‘beneficial ownership’ in the cestui que trust.’

Judges:

Lord Diplock

Citations:

[1976] AC 167

Jurisdiction:

England and Wales

Cited by:

Cited – Buchler and another (as joint liquidators of Leyland DAF Limited) v Talbot and another (as joint administrative receivers of Leyland DAF Limited) and Stichting Ofasec and others HL 4-Mar-2004
The liquidator sought to recover his expenses from assets charged under a floating charge in priority to the chargee.
Held: Barleycorn was decided in error. The liquidators costs incurred in an insolvent winding up were not to be charged . .
Cited – McGrath 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.
Cited – Cambridge Gas Transport Corp v Official Committee of Unsecured Creditors (of Navigator Holdings Plc and Others) PC 16-May-2006
(Isle of Man) A scheme of arrangement was proposed for a company with involvement in several jurisdictions. An order in New York sought assistance in the vesting of shares and assets in the Isle of Man in the creditors committee. Cambridge was a . .
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency, Trusts

Updated: 17 July 2022; Ref: scu.194248

Bristol Airport Plc and Another v Powdrill and Others: CA 21 Dec 1989

An airline company went into administration. The airport seized two airplanes. The administrators claimed they were property within the administration, could not be seized without a court order, and the court should exercise its discretion not to allow seizure.
Held: The definition of property in the 1982 Act was wide enough to include leased property. The planes were capable of being seized to create a lien. The exercising of a lien was taking action to enforce a security, and therefore required the court’s consent. The court had correctly exercised its discretion not to allow seizure to allow the orderly conduct of the administration of the company.
Sir Nicolas Browne-Wilkinson VC said: ‘Although a chattel lease is a contract, it does not follow that no property lease is created in the chattel. The basic equitable principle is that if, under a contract, A has certain rights over property as against the legal owner, which rights are specifically enforceable in equity, A has an equitable interest in such property. I have no doubt that a court would order specific performance of a contract to lease an aircraft, since each aircraft has unique features peculiar to itself. Accordingly in my judgment the ‘lessee’ has at least an equitable right of some kind in that aircraft which falls within the statutory definition as being some ‘description of interest … arising out of, or incidental to’ that aircraft.’

Judges:

Sir Nicolas Browne-Wilkinson VC, Woolf and Staughton L.JJ.

Citations:

[1990] 2 WLR 1362, [1990] Ch 744, [1990] BCLC 585

Links:

lip

Statutes:

Civil Aviation Act 1982 88(1), Insolvency Act 1986 11(3)

Jurisdiction:

England and Wales

Citing:

Cited – Air Ecosse Ltd v Civil Aviation Authority OHCS 1987
. .
Cited – Channel Airways Ltd v Manchester Corporation 1974
There are many species of lien which do not depend on possession, including for example certain equitable liens. The statutory right of detention but conferred by a Private Act was not strictly a lien. . .
Cited – Havelet Leasing Ltd v Cardiff-Wales Airport Ltd 29-Jun-1988
In order to exercise the statutory power of detention of an aircraft, the airport had to do some overt act evidencing the act of detention. Detention by an airport authority must be begun by some overt act. Such act need take no particular form. A . .
Cited – Quazi v Quazi HL 1979
The husband had pronounced a talaq in Pakistan, in accordance with the 1961 Muslim Family Ordinance. The question was whether the English court had jurisdiction on the wife’s petition to dissolve the marriage and make consequential orders relating . .
Cited – Corps v Owners of the Paddle Steamer ‘The Queen of the South’ 1968
Among the peope who might intervene on a ship’s arrest are the harbour authority itself claiming statutory rights of detention and sale. . .
Cited – Smith (a bankrupt) v Braintree District Council HL 1989
The House considered the effects of bankruptcy on the imposition of a committal to imprisonment in default of paying rates.
The purpose of section 285 is to preserve the estate of the bankrupt for the benefit of his unsecured creditors.

Cited by:

Applied – AIG Europe S A v QBE International Insurance Ltd ComC 3-May-2001
A re-insurance contract incorporated terms from the main contract. When asked to construe the incorporation of a clause granting exclusive jurisdiction. In doing so, it was held, that under the Brussels Convention the court had to look to the . .
Cited – Commissioners of Inland Revenue v The Wimbledon Football Club Limited, Ellis, Earp CA 28-May-2004
The Commissioners appealed against a refusal of their application for a revocation of the defendant’s voluntary arrangement in that it had failed to comply with section 4. They complained that the arrangement was unfair to them. It had been agreed . .
Cited – ETI Euro Telecom International Nv v Republic of Bolivia and Another CA 28-Jul-2008
The parties were involved in an international investment dispute arbitration. An injunction had been sought to prevent repatriation of assets to Bolivia.
Held: The international system of arbitration was not subject to any national law and did . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.

Transport, Insolvency, Company

Updated: 17 July 2022; Ref: scu.174712

El Ajou v Dollar Land Holdings Plc and Another: ChD 3 Jan 1993

A non active director may still be company’s ‘directing mind’. The doctrine of attributing the actions of individuals to a company is that ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’
Tracing was no longer available at common law because funds received had become mixed with others, but the remedy remained available in equity.

Judges:

Millett J

Citations:

Times 03-Jan-1993, [1993] 3 All ER 717

Jurisdiction:

England and Wales

Cited by:

Cited – Shalson v Russo ChD 11-Jul-2003
The claimant sought recovery of substantial sums he had advanced by way of loan, where the loan was induced by fraud. He sought to trace the funds into, inter alia, a motor yacht which it had been used to purchase.
Held: The transaction was . .
Appeal from – El 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: . .
Cited – Jetivia 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 . .
See Also – El Ajou v Dollar Land Holdings Plc ChD 1995
The tracing of assets into the hands of a third party depends upon a notional charge. There are no inflexible rules. The essential elements of ‘knowing receipt’ are: ‘For this purpose the plaintiff must show, first, a disposal of his assets in . .
Lists of cited by and citing cases may be incomplete.

Company, Equity

Updated: 17 July 2022; Ref: scu.80281

Macmillan Inc v Bishopsgate Investment Trust Plc: Chd 17 Mar 1993

Evidence given to a liquidator was not discoverable in civil proceedings.

Citations:

Gazette 17-Mar-1993

Statutes:

Companies Act 1985

Jurisdiction:

England and Wales

Cited by:

Appeal from – Macmillan Inc v Bishopsgate Investment Trust Plc CA 1-Sep-1993
A subpoena ad duces tecum issued against a third party was to be used to bring evidence before the court, not as an equivalent to discovery.
Judge’s discretion not to order production not to be interfered with. . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company, Insolvency

Updated: 17 July 2022; Ref: scu.83282

Zavarco Plc v Yusof and Another: ChD 17 Jul 2019

The claimant’s case in outline is that (i) the defendant formerly held shares in the claimant, (ii) he was required to pay for the shares in cash, (iii) he has failed to pay for them and (iv) he is, despite the shares having been forfeited, liable to the claimant as a debtor for the nominal value of the shares which is 36 million euros.

Judges:

Marsh CM

Citations:

[2019] EWHC 1837 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Company

Updated: 17 July 2022; Ref: scu.640081