Category: Company

Koeller and Another v Coleg Elidyr (Camphill Communities Wales) Ltd: CA 12 Jul 2005

The applicants occupied a house as licensees. An order for possession was made against them. The company was a charitable company set up to provide accomodation in communities for handicapped adults. The workers in the communities were not formally salaried, but the Inland Revenue had taxed the benefits received. It was argued for them at the time that no intention to create legal relations existed. The claimants now said that they had a status as contractual tenants, and had agreed to resign from the company on the basis that financial provision would be made to allow them to find alternative accomodation. It was then proposed to purchase a property in which they could live, and an approach was made to the Charities Commission to approve the arrangement. The Commission declined. The applicants now claimed a proprietary estoppel.
Held: The company and the community were separate in law. The decision to seek possession was that of the company alone, and was not he same as the decision to expel him from the community. It bordered on the fanciful to say that the decision of the company was in breach of natural justice. They acted fairly and properly. The appellant had accepted the decision of the community to expel him. No intention to create contractual relations was established. The approach taken by the Charity Commission was to be regretted.

Judges:

Auld, Parker, Arden, LJJ

Citations:

[2005] EWCA Civ 856, [2005] BCLC 379

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Byrne v Kinematograph Renters Society Ltd 1958
The court formulated the principles of natural justice: ‘What then are the requirements of natural justice? First, I think that the person accused should know the nature of the accusation made; secondly, that he should be given an opportunity to . .
Cited – Baird Textile Holdings Limited v Marks and Spencer Plc CA 28-Feb-2001
The court considered the requirements to establish a proprietary estoppel: ‘It is on authority an established feature of both promissory and conventional estoppel that the parties should have had the objective intention to make, affect or confirm . .
Cited – Faramus v Film Artistes’ Association HL 1964
Parties to a contract may be bound to act in it according to the rules of natural justice. . .
Cited – Lee v Showmens Guild of Great Britain CA 1952
Decisions of inferior tribunals, including arbitrators, were reviewable on the basis of general error of law on record for which certiorari might issue. A decision may be reviewable where there was no evidence supporting particular conclusions.
Cited – Shearson Lehman Hutton Inc and Another v Maclaine Watson and Co Ltd and Others 1989
The court considered the requirements of natural justice in the light of the decision in Gaiman: ‘Nor do I consider my conclusions to be inconsistent with the decision of Megarry J in [Gaiman] because Megarry J held that the principles of natural . .
Cited – McInnes v Onslow-Fane ChD 1978
The applicant had been granted a boxing manager’s licence for several years. He appealed its refusal now over a few years.
Held: The case was in the application for a licence rather than in a forfeiture or an expectation class, and there was . .
Cited – Gaiman v The National Association for Mental Health ChD 1970
The court considered the articles of an association without share capital but limited by guarantee. One article provided that a member should cease to be a member of the association if he were requested by resolution of the council to resign. It was . .
Cited – O’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 . .
Cited – Booker v Palmer CA 1942
The owner of a cottage agreed to allow a friend to install an evacuee in the cottage rent free for the duration of the war.
Held: There was no intention on the part of the owner to enter into legal relationships with the evacuee. Lord Greene . .
Cited – Nagle v Fielden CA 1966
The applicant, a lady jockey appealed refusal by the Jockey Club to issue to her a jockey’s license based simply on the fact of her sex.
Held: Her appeal succeeded. The refusal was against public policy. Where a man’s right to work was in . .

Cited by:

Cited – The New Testament Church of God v Reverend Stewart CA 19-Oct-2007
The appellant appealed a finding that the respondent had been its employee, saying he was a minister of religion.
Held: The judge had been entitled to find an intention to create legal relations, and therefore that the claimant was an . .
Lists of cited by and citing cases may be incomplete.

Land, Estoppel, Company

Updated: 01 July 2022; Ref: scu.228431

Knox v Vere, Dean and others: PC 28 Jun 2005

(Barbados) An old sugar plantation company was to sell its holding to developers to repay debts. One shareholder asserted a right of pre-emption. She failed in a claim that the company was acting in a manner prejudicial to her minority interests, and appealed.
Held: The issue was decided by interpretation of the company’s articles. The clauses gave pre-emption rights to existing members and to ‘selected persons’. The appellant said that members were to be given priority over non-members. The respondent said that discretion was given to directors. The clause was unlikely to restrict the directrs’ discretion as argued. The argument proposed by the appellant would nullify entirely the pre-emption rights given to the selected persons, and that could not stand. The appeal failed.

Judges:

Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Sir Anthony Evans

Citations:

[2005] UKPC 25

Links:

Bailii, PC

Jurisdiction:

Commonwealth

Company

Updated: 01 July 2022; Ref: scu.228317

In re Braemar Investments: ChD 1998

Judges:

Hoffmann J

Citations:

[1998] BCLC 556

Jurisdiction:

England and Wales

Citing:

Explained – In re Charles and Co Ltd 1935
A court granting an order extending the period for registration of a company charge may allow a further delay before registration to allow for objections from other creditors. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 July 2022; Ref: scu.238396

HM Revenue and Customs v Egleton and others: ChD 19 Sep 2006

The claimants had applied for the winding up of a company for very substantial sums of VAT due to it. Anticipating that hearing, it now sought restraining orders against the director defendants, alleging that there had been a carousel or missing trader fraud. The defendants said that the interim frezing orders made had been without jurisdiction or should not have been made as a matter of discretion.
Held: The court did have jurisdiction to grant the freezing orders against the respondents in this case, or to continue them pending the appointment of a liquidator of CandE: ‘the time has come for the English Courts to recognise, consistently with the carefully considered conclusion of the High Court of Australia, that the jurisdiction to grant freezing orders against third parties is not rigidly restricted by the Chabra requirement to show that, at the time when the order is sought, the third party is already holding or in control of assets beneficially owned by the defendant. ‘ and ‘once the relatively clear Chabra boundary line is breached, there is no wider boundary which has any sufficient clarity to serve as a workable condition to the existence of jurisdiction, than the broad confines of the second limb of the principle in paragraph 57 of the main judgment in Cardile. In particular, it seems to me that a rigid causation test is too narrow and potentially unjust, in particular because it would protect third party fraudsters who had in reality caused the claimant’s loss from exposure to a freezing order while exposing honest third parties . . ‘

Judges:

Briggs J

Citations:

[2006] EWHC 2313 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Cardile v LED Builders PTY Limited 1999
(High Court of Australia) The respondent (‘LED’) twice sought relief from Eagle Homes PTY Limited (‘Eagle’) for copyright infringement. Anticipating the proceedings the only shareholders and controllers of Eagle, the claimants arranged the . .
Cited – Re: Ravenhart Service (Holdings) Limited ChD 2004
The petitioners in a combined section 459 and contributories’ winding up petition sought interim relief akin to an ordinary freezing order but which was designed specifically to prevent the assets of the company from dissipation, and similar relief . .
Cited – C Inc Plc v L and Another QBD 4-May-2001
The plaintiff had obtained judgment against L, only then to find that she claimed that all only apparent assets were held by her on trust for or as agent for her husband who was overseas. The plaintiff therefore now set out to add him, and to claim . .
Cited – In Re Premier Electronics (GB) Ltd ChD 27-Feb-2001
The petitioners brought an action under s459 and obtained freezing orders both in relation to the property of the subject company and in relation to the assets of its two executive directors up to the value of pounds 500,000 each. On the adjourned . .
Cited – Siskina (owners of Cargo lately on Board) v Distos Compania Naviera SA HL 1979
An injunction was sought against a Panamanian ship-owning company to restrain it from disposing of a fund, consisting of insurance proceeds, in England. The claimant for the injunction was suing the company in a Cyprus court for damages and believed . .
Cited – Mercantile Group (Europe) Ag v Aiyela and Others CA 4-Aug-1993
Interlocutory injunctions including Mareva procedures and orders are available to support the enforcement of a judgment. The purpose of such a jurisdiction is so that the court can ‘ensure the effective enforcement of its orders’. A court may still . .
Cited – Aiglon Limited and another v Gau Shan Co Limited ChD 1993
The defendants had obtained world-wide Mareva injunctions in support of substantive proceedings by way of their counterclaim to enforce an arbitration award against the plaintiffs under section 26 against two companies, Aiglon Limited and L’Aiglon . .
Cited – TSB Private Bank International SA v Chabra ChD 1992
Asset freezing orders may be made against persons in relation to whom the claimant asserts no cause of action and seeks no money judgment, but in relation to whom there is an arguable case that assets held in their name or under their control are in . .
Lists of cited by and citing cases may be incomplete.

Customs and Excise, Litigation Practice, Company

Updated: 01 July 2022; Ref: scu.245032

In Plus Group Ltd and Others v Pyke: CA 21 Mar 2002

Appeal by the claimants against an order dismissing their claim against the defendant and directing that judgment be entered against each of them for pounds 115,818, together with interest, on the defendant’s counter-claim.

Judges:

Lord Justice Brooke

Citations:

[2002] EWCA Civ 370, [2002] 2 BCLC 201, [2003] BCC 332

Links:

Bailii

Jurisdiction:

England and Wales

Company

Updated: 30 June 2022; Ref: scu.169998

Caledonian Railway Co v North British Railway Co: HL 17 Feb 1881

Statute – Construction – Railway – Period of Payment of Dividends on Amalgamation of Two Railways.
The preamble of an Act of Parliament whereby a certain line of railway was transferred from the company to which it had hitherto belonged to a new company made up of that company and another, declared that it was expedient that the companies ‘should have equal rights and powers, and be subject to equal liabilities,’ in respect of the line transferred; by the said Act it was provided that the new company should pay to the company that formerly owned the railway, from and after the vesting period, half-yearly on 1st March and 1st September, a sum equal to one-half of the dividends, interests, and rents for which the former owners had been liable to the shareholders, creditors, and owners of lines in connection with their own respectively. The vesting period was 1st February 1880, the dividends accrued from profits earned in the period of six months preceding the 1st of February and were payable in March, the interests were payable half-yearly at Whitsunday and Martinmas, and the rents were payable annually on 1st February. Held ( aff. judgment of the Court of Session), in a question as to whether the payments of dividends imposed upon the new company were to be made on 1st March or 1st September 1880, that on a fair construction of the terms of the statute they did not fall to be made till 1st September, the payments due before that date having to be met out of funds that had accrued before the period of vesting, and the object of the section of the Act under construction being to settle the proportionate liability of the parties in the new undertaking for the period after it should fall under their joint ownership.

Judges:

Lord Chancellor (Selborne), Lords Blackburn and Watson

Citations:

[1881] UKHL 341, 18 SLR 341

Links:

Bailii

Jurisdiction:

Scotland

Company

Updated: 30 June 2022; Ref: scu.636788

Nygate and Another v E Squared Ltd: ChD 16 Mar 2006

Where administrators of a company have followed the statutory procedure for converting an administration into a creditors voluntary liquidation, but the notice sent by them to the registrar of companies is not registered by him until after the date on which the administration has ended, is the process nonetheless effective to put the company into liquidation?

Judges:

David Richards J

Citations:

[2006] EWHC 532 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 30 June 2022; Ref: scu.239282

Ultraframe UK Ltd v Fielding and others: ChD 12 Jan 2004

Citations:

[2004] EWHC 80 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Ultraframe UK Limited v Clayton, Fielding and Others ChD 3-Oct-2002
The claimants asserted infringement of their registered design rights in parts used in their double glazing and conservatory units. ‘Therefore it is possible for design right to subsist in the design of the part of the article which is not excluded . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 30 June 2022; Ref: scu.226160

Unit Construction Co Ltd v Bullock: HL 30 Nov 1959

The UK parent company owned subsidiaries incorporated in East Africa and carried on trading activities there. The managing director of the parent company concluded that ‘the situation of the African subsidiaries was becoming so serious that it was unwise to allow them to be managed in Africa any longer, and that their management must be taken over by the directors of [the parent company] in London.’ The board of directors of the parent company ‘decided that . . they were forced to take over management and control’, and the representative of the parent company in East Africa took over the functions of the local boards, which still existed but stood aside, and controlled the subsidiaries in accordance with the requirements of the parent. Much of that may have been irregular, or even unconstitutional, but it was what happened.
Held: The African subsidiaries had become resident in the United Kingdom. A company can come to be resident in a territory even if it does not hold directors’ meetings there.

Citations:

[1960] AC 455, [1959] UKHL TC – 38 – 712

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – New Zealand Forest Products Finance NV v Commissioner of Inland Revenue 1995
(New Zealand) The taxpayer company was established in the Netherlands Antilles as the subsidiary of a New Zealand parent company. It was a vehicle company whose purpose was to raise borrowings on the Eurobond market and to lend the money on to the . .
Cited – Untelrab Ltd v McGregor 1996
(Inland revenue Comissioners) A Jersey company was established as a wholly owned subsidiary of a UK-based group. The directors met in Bermuda, not in Jersey. Its function was to hold surplus group funds, to invest them for the time being, and to . .
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 by:

Applied – Esquire Nominees Ltd v Commissioner of Taxation 1971
(High Court of Australia) The company had directors who lived on Norfolk Island, but also had close connections with an Australian firm of accountants (WBBC), which evolved and implemented a tax scheme for an Australian family. The company acted as . .
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 . .
Lists of cited by and citing cases may be incomplete.

Company, Income Tax

Updated: 30 June 2022; Ref: scu.224773

Keppell v Bailey: ChD 29 Jan 1834

The court was asked whether the owner of land can burthen it in the hands of future owners by the creation of novel rights.
Held: Lord Brougham said: ‘It must not be supposed that incidents of a novel kind can be devised and attached to property at the fancy and caprice of any owner. It is clearly inconvenient both to the science of the law and the public weal that such a latitude should be given. There can be no harm in allowing the fullest latitude to men in binding themselves . . to answer in damages for breach of their obligations . . but great detriment would arise and much confusion of rights if parties were allowed to invent new modes of holding and enjoying real property.’
As to the subject of covenants, he said: ‘The covenant (that is, such as will run with the land) must be of such a nature as ‘to inhere in the land,’ to use the language of some cases; or ‘it must concern the demised premises, and the mode of occupying them,’ as it is laid down in others: ‘it must be quodammodo annexed and appurtenant to them,’ as one authority has it; or, as another says, ‘it must both concern the thing demised, and tend to support it, and support the reversioner’s estate.’ Now, the privilege or right in question does not inhere in the land, does not concern the premises conveyed or the mode of occupying them: it is not appurtenant to them. A covenant, therefore, that such a right should be enjoyed, would not run with the land. Upon the same principle, it appears to us that such a right, unconnected with the enjoyment or occupation of the land, cannot be annexed as an incident to it: nor can a way appendant to a house or land be granted away, or made in gross; for, no one can have such a way but he who has the land to which it is appendant: Bro. Abr. Graunt, pl. 130 (citing, M. 5 H. 7, fo. 7, pl. 15). If a way be granted in gross, it is personal only, and cannot be assigned. So, common in gross sans nombre may he granted, but cannot be granted over: per Treby, C. J., in Weekly v. Wildman, 1 Lord Raym. 407. It is not in the power of a vendor to create any rights not connected with the use or enjoyment of the land, and annex them to it: nor can the owner of land render it subject to a new species of burthen, so as to bind it in the hands of an assignee.’

Judges:

Lord Brougham LC

Citations:

[1834] EWHC Ch J77, (1834) 2 My and K 517, [1834] 39 ER 1042, [1834] EngR 193, (1834) Coop T Br 298, (1834) 47 ER 106, [1834] EngR 448, (1834) 39 ER 1042

Links:

Bailii, Commonlii, Commonlii

Jurisdiction:

England and Wales

Cited by:

Cited – Tulk v Moxhay 22-Dec-1848
Purchaser with notice bound in Equity
A, being seised of the centre garden and some houses in Leicester Square, conveyed the garden to B in fee, and B covenanted for himself and his assigns to keep the garden unbuilt upon.
Held: A purchaser from B, with notice of the covenant, was . .
Lists of cited by and citing cases may be incomplete.

Contract, Company

Updated: 30 June 2022; Ref: scu.245419

Smith v Charles Building Services Ltd and Another: ChD 22 Apr 2005

The claimant said that his name had been removed from the company register unlawfully.

Judges:

Mr Justice Mann

Citations:

[2005] EWHC 654 (Ch), [2005] BCC 513

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Shtun v Zaljejska CA 18-Apr-1996
Evidence of prejudice from inexcusable delay is to be examined carefully. It is not essential for a finding of prejudice in such a case that there should be evidence of the particular respects in which potential witnesses’ recollections have been . .

Cited by:

Appeal from – Smith v Charles Building Services Ltd and Another CA 19-Jan-2006
An application was made for the rectfication of the company’s registers.
Held: The claimant’s name had been improperly removed from the register, and therefore he was prima facie entitled to a rectification. However even if rectified, the . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 29 June 2022; Ref: scu.224335

Giovanni Mallone v BPB Industries Plc: CA 19 Feb 2002

The claimant was a director of the respondent. On his dismissal, his share options were cancelled. He claimed this was in breach of his rights under the scheme. The company appealed a finding that they were so in breach. The scheme distinguished between mature options, those over three years old, and others, and also gave the directors discretion. The options had been cancelled before his resignation as director, but after his apparent dismissal from his employment. The scheme provided that the rights continued until his position as an officer of the company ceased. They were found to have behaved irrationally in cancelling the options, even though he might also be entitled to compensation under Italian law.
Held: The discretion to cancel the options existed for mature options also. Was the discretion exercised irrationally. Though given an absolute discretion, it was one to find the appropriate proportion. There was no evidence of it having been considered properly, and the discretion had been exercised irrationally.

Judges:

Lord Justice Waller, Lord Justice Rix, And, Mr Justice Wilson

Citations:

[2002] EWCA Civ 126, [2002] ICR 1045

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Tesco 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.
Cited – Commerzbank Ag v Keen CA 17-Nov-2006
The bank had sought summary dismissal of a claim for non-payment of bonuses to the claimant a former employee, and now appealed refusal of its request for summary dismissal, saying that the claim had no prospect of success. The claimant said that . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 29 June 2022; Ref: scu.167635

Ambler v Bolton: CA 1872

An inalienable government contract held by one of the partners constituted a partnership asset. On the dissolution of the partnership, a value had to be given to it (since it could not be sold) and the partner who held it debited with that amount in the partnership accounts.

Judges:

Lord Romilly MR

Citations:

(1872) LR 14 Eq 427

Statutes:

Partnership Act 1890 20

Jurisdiction:

England and Wales

Cited by:

Cited – Barbados Trust Company Ltd v Bank of Zambia and Another CA 27-Feb-2007
The creditor had assigned the debt, but without first giving the debtor defendant the necessary notice. A challenge was made to the ability of the assignee to bring the action, saying that the deed of trust appointed to circumvent the reluctance of . .
Cited – Faulks v Faulks ChD 1992
One brother, as tenant farmed land under a partnership with his brother. On the death of either partner, an account was to be taken and a valuation. On the death of the tenant, there was a dispute as to whether the value of the farm’s milk quotahad . .
Lists of cited by and citing cases may be incomplete.

Equity, Company

Updated: 29 June 2022; Ref: scu.249315

Hardip Singh Gill v Kulbir Singh Sandhu: ChD 26 Jan 2005

The partnership had been dissolved. It had involved conversion of a property to be run as a nursing home. The claimant was to manage the home, and the profits would be used first to pay him a salary, and then to be divided equally. When wound up there was a deficit in the partnership, and the claimant owed the other several thousand pounds.
Held: The words ‘share of the partnership’ meant the outgoing partner’s share in the proprietary ownership assets. When the Act intended to refer to net assets it did so explicitly.

Judges:

Lightman J

Citations:

[2005] 1 WLR 1979, [2005] EWHC 43 (Ch), Times 07-Feb-2005, [2005] 1 All ER 990

Links:

Bailii

Statutes:

Partnership Act 1890 42

Jurisdiction:

England and Wales

Citing:

Cited – In Re Bourne CA 1906
On the dissolution of a partnership and in the absence of some agreement to the contrary, the partners have the right, and the duty, to realise the partnership properly and for the purpose of that realisation to carry on the business if it is . .
Cited – Barclays Bank Trust Co Ltd v Bluff 1982
Section 42(1) did not apply to capital profits made during the post dissolution period. . .
Cited – Taylor v Grier (No 3) ChD 12-May-2003
. .
Cited – Willett v Blanford 1842
A partner continuing after a dissolution was liable to account as a fiduciary to the outgoing partner in respect of his unauthorised use for his own benefit of the assets of the partnership. The quantum of the entitlement of the Outgoing Partner in . .
Cited – Manley v Sartori ChD 1927
The death of a partner caused the dissolution of the partnership. The survivors continued the partnership business on their own account. The question arose as to the entitlement of the personal representatives of the deceased partner to a share of . .
Cited – Yates v Finn 1880
After the dissolution of a partnership, it was held right and equitable to divide the profits between the parties in accordance with their contributions to the capital of the partnership. . .
Cited – Popat v Shonchatra CA 25-Jun-1997
Partnership assets, both as to capital and revenue were to be divided equally between the partners in the absence of an agreement otherwise even though they had made an unequal contribution. . .
Cited – De Renzy v De Renzy 1924
(New Zealand) Brothers were partners. One died and the other, wrongly believing himself entitled to do so under an agreement to purchase his brother’s share, made a payment to his brother’s estate of the purchase price for that share which he . .
Cited – R W Pathirana v A Pathirana PC 1967
Section 29 requires a partner to account to the partnership for any private benefit which he derives at the expense of the partnership, and this duty subsists after the dissolution of the partnership until the winding up is completed. An inalienable . .

Cited by:

Appeal from – Gill v Sandhu (No. 2) CA 2-Nov-2005
The court considered the valuation of asets on the dissolution of a partnership at will.
Held: The appeal was allowed. The proper share of a partner in the assets was his proportion ascertained from the partnership assets after they had all . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 29 June 2022; Ref: scu.222022

Inland Revenue Commissioners v J Bibby and Sons Limited: HL 17 May 1945

The House was asked whether shares in a company held by directors as trustees could be aggregated with shares held by them beneficially for the purpose of determining whether the directors had ‘a controlling interest’ in the company.
Held:
Russell of Killowen said: ‘When the section speaks of directors having a controlling interest in a company, what it is immediately concerned with in using the words ‘controlling interest’ is not the extent to which the individuals are beneficially interested in the profits of the company as a going concern or in the surplus assets in a winding up, but the extent to which they have vested in them the power of controlling by votes the decisions which will bind the company in the shape of resolutions passed by the shareholders in general meeting. In other words, the test which is to exclude a company’s business from subsection (9)(a) and include it in (9)(b), is the voting power of its directors, not their beneficial interest in the company.
For the purpose of such a test the fact that a vote-carrying share is vested in a director as trustee seems immaterial. The power is there, and though it be exercised in breach of trust or even in breach of an injunction, the vote would be validly cast vis-a-vis the company, and the resolution until rescinded would be binding on it.’
Lord Macmillan said: ‘The question whether the directors of the respondent company have the control of it by their voting power as shareholders must in my view be determined by the memorandum and articles of the company and by the register of shareholders. By the constitution of the company, as I have already mentioned, the voting power is vested in the ordinary shareholders and the register shows that the directors hold a majority of these shares . .
So far as the company is concerned the relation between such of its shareholders as happen to be trustees and their beneficiaries is res inter alios. It may be that a trustee shareholder may, as between himself and his cestuis que trust, be under a duty to exercise his vote in a particular manner, or a shareholder may be bound under contract to vote in a particular way (cf Puddephatt v Leith). But with such restrictions the company has nothing to do. It must accept and act upon the shareholder’s vote notwithstanding that it may be given contrary to some duty which he owes to outsiders. The remedy for such breach lies elsewhere.’
Lord Porter said: ‘The phrase is a composite one and the combination means no more than that the directors must have an interest such as enables them to control the activities of the company: it does not require some personal financial interest on their part which control enables them to exploit. It may be that trustees can ultimately be brought to book for activities which would not lay a beneficial owner open to attack or complaint. Nevertheless for good or ill the trustee like the beneficial owner controls, though if his powers be wrongly exercised they may in some way or other be capable of being challenged.’
Lord Simonds said: ‘What, my Lords, constitutes a controlling interest in a company? It is the power by the exercise of voting rights to carry a resolution at a general meeting of the company. Can the directors of the respondent company by the exercise of their voting rights carry such a resolution? Yes: for they are the registered holders of more than half the ordinary shares of the company. Therefore they have a controlling interest in the company . .
Those who by their votes can control the company do not the less control it because they may themselves be amenable to some external control. Theirs is the control, though in the exercise of it they may be guilty of some breach of obligation whether of conscience or of law. It is impossible (an impossibility long recognised in company law) to enter into an investigation whether the registered holder of a share is to any and what extent the beneficial owner. A clean cut there must be.’

Judges:

Macmillan, Russell of Killowen, Porter, Simonds LL

Citations:

[1945] 1 All ER 667, [1945] UKHL TC – 29 – 167, 29 TC 167

Links:

Bailii

Cited by:

Distinguished – Bermuda Cablevision Limited and others v Colica Trust Company Limited PC 6-Oct-1997
(Bermuda) An alternative remedy to winding up is available to a shareholder where oppressive conduct is alleged, though the main thrust is that the conduct is unlawful. . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Company

Updated: 28 June 2022; Ref: scu.221572

Commission v Spain C-84/03: ECJ 13 Jan 2005

ECJ Law Relating To Undertakings – Failure to fulfil obligations – Directives 93/36/EEC and 93/37/EEC – Public contracts – Award procedure for public supply and public works contracts – Scope – Definition of contracting authority – Inter-administrative cooperation agreements – Definition of contract – Use of the negotiated procedure in cases not provided for by the directive

Judges:

CWATimmermans, P

Citations:

[2005] ECR I-139, [2005] EUECJ C-84/03

Links:

Bailii

Statutes:

Directive 93/37/EEC, Directive 93/36/EEC

Jurisdiction:

European

Cited by:

Cited – Edenred (UK Group) Ltd and Another v HM Treasury and Others SC 1-Jul-2015
Challenge to the decision by HM Treasury to use National Savings and Investments to deliver the Government policy of Tax-free Childcare. The claimants said that the 2006 Regulations imposed an obligation to put such contracts out to tender.
Lists of cited by and citing cases may be incomplete.

Company, Administrative

Updated: 28 June 2022; Ref: scu.221473

In re Trident Fashions plc: ChD 5 Feb 2004

Creditors of the company sought relief, saying the voluntary arrengement made had been based upon the omission of material by the insolvency practitioner.
Held: A court could intervene in such a case only where the actions of the practitioner were such that no reasonable practitioner would do. When asked questions, the practitioner had to give fair and balanced answers.

Judges:

Lewison J

Citations:

Times 23-Apr-2004

Jurisdiction:

England and Wales

Citing:

Cited – Somji v Cadbury Schweppes Plc CA 20-Dec-2000
Where a party’s agreement to an individual voluntary arrangement had been obtained by an advantage offered to that creditor but not disclosed to others, the entire arrangement could be set aside. In this case the offer to purchase a debt after the . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 28 June 2022; Ref: scu.196712

Towcester Racecourse Co Ltd v The Racecourse Association Ltd: ChD 23 Oct 2002

The applicant was a member of the respondent company. The respondent had prepared a report into the behaviour of a chairman of its own enquiry into televising racing, but where it had been alleged that the chairman, himself a TV owner had made an improper approach to a TV company. The applicant sought a copy of the report and supporting material.
Held: It was not possible to construe the articles of the company to impose such an obligation. Extrinsic circumstances could not be relied upon to create an interpretation of the articles inconsistent with their plain words. No duty of care arose in the applicant’s favour, and no public law interests arose.

Judges:

Mr Justice Patten

Citations:

Gazette 21-Nov-2002

Jurisdiction:

England and Wales

Company

Updated: 28 June 2022; Ref: scu.178243

Laidlay and Others (Laidlay’s Trustees) v The Lord Advocate: HL 7 Aug 1890

A partnership of fourteen persons in Great Britain and two in India carried on a business ‘for the production . . of indigo and silk and other produce, and for the sale in Calcutta, or shipment for realisation in Europe, of such produce.’
The partnership deed provided that the business in India should be conducted by managing agents in Calcutta who could not be dismissed so long as they held certain shares in the partnership, and who alone had power to use the name of the firm; and further, that all the partnership books were to be kept in Calcutta. The annual balance-sheets were prepared and the profits appropriated to the partners by the managing agents, who annually sent to London certified reports and abstracts of accounts showing the business and profits, and the interest of each partner therein, and generally executed all acts in connection with the practical working of the business.
A financial firm in London were constituted agents for the partnership in Europe, and it was agreed that on the security of a mortgage over the assets they should make the necessary advances for carrying on the business, and that the produce of the business, or, if realised in India, the proceeds thereof, should be remitted to them. The profits were paid to the partners through the London agents, who were irrevocably appointed arbiters to determine any dispute. between partners or their representatives.
The property of the partnership was vested in three trustees resident in this country in terms of the partnership deed.
Six of the parties resident in this country were constituted a committee to advise with the agents in London and Calcutta, and to decide, subject to the approval of a general meeting of the partners, on all matters affecting the partnership.
The deed also provided that on the death of a partner the partnership should not be dissolved, nor should his representatives become a partner, but the interest of such . . partner . . shall cease on the 30th September next after his decease, . . and his share . . shall be dealt with in manner following . . if his representatives shall desire to sell such share to any of the partners or to any other person, to be approved by the committee, the same may be sold for such price as may be agreed on.’ If not sold within six months the fair value of the share was to be determined by the London agents, and upon the representatives executing a transfer or assignment of the entire share, the trustees of the partnership were to pay to the representatives the sum so ascertained.
A partner of the firm, domiciled in Scotland, died, and his executors sold his shares to his three sons. The executors failed to include the value of these shares in the inventory of personal estate belonging to the deceased in this country, and they were sued by the Inland Revenue for additional inventory duty. Held ( rev. the judgment of the First Division) that the asset of the deceased’s estate for which inventory duty was sought was not of the nature of a claim for a sum of money, but was a share of a business and assets locally situated in India, and that that share was not liable for inventory duty in this country

Judges:

Lord Herschell and Lords Watson, Macnaghten, and Morris

Citations:

[1890] UKHL 1035, 27 SLR 1035

Links:

Bailii

Jurisdiction:

Scotland

Company

Updated: 28 June 2022; Ref: scu.636738

Hunter v Senate Support Services Ltd and others: ChD 2005

The court set aside a forfeiture of shares for non-payment of a call. The decisions of the directors to forfeit the shares and to transfer the forfeited shares to the group holding company were flawed, though not improperly motivated, because the directors regarded forfeiture to be the inevitable result of non-payment of the call and had acted without giving any consideration to possible alternative courses of action or exercising a genuine discretion whether to forfeit, as they were bound to do.
As to the directors’ duty where a shareholder could not take rights up: ‘where it is known or foreseen that the minority shareholder or shareholders will or may not have the money or inclination to subscribe, the directors should, in fulfilment of the requirement of even-handedness and fairness, consider what price could and should be extracted from those willing and able to subscribe. They should not unthinkingly issue shares at par. In a simple case where the majority are acting in unison, full value may be required. In other cases, a discount for the assumption of increased risk, or to make the offer attractive to those interested in subscribing, may be appropriate. Quite where the price will fall within the permissible range will depend on the particular circumstances of any given case. What is clear to my mind, however, is that the fiduciary nature of the power requires a board to consider these matters fairly, in the interests of all groups of shareholders and having regard to the foreseeable range of responses. The impact of that duty may be more acute if the board members, or those in a position to control or influence them, stand to benefit appreciably from the exercise of the power in a particular way. Any failure to give proper consideration to the price in the light of the factors I have mentioned may, and ordinarily will, amount to a breach of fiduciary duty.’

Judges:

Mr John Randall QC

Citations:

[2005] 1 BCLC 175

Jurisdiction:

England and Wales

Citing:

Applied – Ex parte Glossop; Re a Company (No 00370 or 1987) ChD 1988
The court heard a complaint as to the non payment of dividends. Harman J said: ‘It is, in my judgment, vital to remember that actions of boards of directors cannot simply be justified by invoking the incantation ‘a decision taken bona fide in the . .
Applied – Abacus Trust Company (Isle of Man) Colyb Limited v Barr, Barr, and Barr ChD 6-Feb-2003
The court considered the Rule in Hastings-Bass, and specifically (1) whether the trustee’s decision is open to challenge when the failure to take a consideration into account is not attributable to a breach of fiduciary duty on the part of the . .

Cited by:

Cited – Kohli v Lit and Others ChD 13-Nov-2009
The claimant asserted that the other shareholders had acted in a manner unfairly prejudicial to her within the company.
Held: The claimant was allowed to bring in without prejudice correspondence to contradict evidence by the defendant which . .
Cited – Pitt and Another v Holt and Others ChD 18-Jan-2010
The deceased had created a settlement in favour of his wife. He suffered serious injury and placed the damages in trust, but in a form which created an unnecessary liability to Inheritance Tax on his death. The wife’s mental health act receiver now . .
Cited – Pitt and Another v Holt and Another ChD 18-Jan-2010
The claimant sought to unravel a settlement she had made as receiver for her late husband, saying that it had been made without consideration of its Inheritance Tax implications. The Revenue said that there was no operative mistake so as to allow . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 28 June 2022; Ref: scu.378393

Freakley, Gleave, Squires, T&N Limited v Centre Reinsurance International Company, Muenchener Rueckversicherungs-Gesellschaft, European International Reinsurance Company Limited, Curzon Insurance Limited: ChD 26 Nov 2004

Judges:

The Hon Mr Justice Richards

Citations:

[2004] EWHC 2740 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – T and N Limited, Associated Companies of T and N Ltd (In Administration) v Royal and Sun Alliance Plc, and others ChD 9-May-2003
T and N had exposure to asbestosis claims; these claims were insured by Lloyd’s but on terms that if payments were to be made, T and N should make certain reimbursements to Lloyd’s. T and N then insured with a captive company known as Curzon their . .
See Also – Re Tand N Ltd and Others ChD 21-Oct-2004
. .
See Also – Alexander Forbes Trustee Services Limited and Another v Jackson and Others ChD 2-Nov-2004
. .

Cited by:

See Also – T and N Ltd and Others, Re the Insolvency Act 1986 (Communications) ChD 8-Dec-2004
. .
See Also – In re T and N Ltd and Others, Re Insolvency Act 1986 ChD 14-Dec-2005
The court considered the case of Glenister and similar and said: ‘I accept the submission that these cases are not in point to the issue as regards future asbestos claims. There is no element of discretion as regards such claims. If the ingredients . .
See Also – T and N Ltd and Others, In the Matter of the Insolvency Act 1986 ChD 21-Dec-2005
. .
See Also – T and N Ltd and others v In the Matter of the Insolvency Act 1986 (Conflict of Law) ChD 21-Dec-2005
. .
See Also – In the Matter of T and N Limited and others ChD 12-Apr-2006
. .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 27 June 2022; Ref: scu.220046

Mytravel Group Plc, Re Companies Act 1985: ChD 24 Nov 2004

The company sought approval of a proposed reconstruction under the section.
Held: Approval could not be given. To count as a reconstruction two principal qualities were required. The business carried on should be the same or similar, and those carrying on the business should be the same or similar. Here the proposal would result in the former shareholders owning only 4% of the new business.

Judges:

Mann J

Citations:

[2004] EWHC 2741 (Ch), Times 30-Nov-2004

Links:

Bailii

Statutes:

Companies Act 1985 425

Jurisdiction:

England and Wales

Citing:

Cited – In the Matter of Telewest Communications Plc and in the Matter of Telewest Finance (Jersey) Ltd ChD 22-Jun-2004
Richards J said: ‘In considering the primary position of the Opposing Bondholders, it is important to keep in mind the function of the court at this stage. This is an application by the companies for leave to convene meetings to consider the . .
Cited – Hooper v Western Counties and South Wales Telephone Co Ltd 1892
The court placed a restrictive meaning on the idea of a company reconstruction. The new company is to consist of the old shareholders. . .
Cited – Practice Statement (Companies Schemes of Arrangement) 2002
. .
Cited – Swithland Investments Ltd v IRC 1990
The court considered whether a scheme of re-arrangement of a company was a reconstruction within the meaning of the Stamp duty legislation. . .
Cited – Re South African Supply and Cold Storage Co 1904
The court had to construe the words ‘reconstruction or amalgamation’ in the memorandum of association of a company: ‘The only question I have to decide is whether, in the case of each of these two companies, there has or has not been a winding-up . .
Cited – Brooklands Selangor Holdings Limited v Inland Revenue Commissioners ChD 1970
The court had to consider whether the arrangments before it amounted to a reconstruction for stamp duty purposes: ‘I will deal first with the question whether those transactions amounted to a reconstruction. In ordinary speech the word . .
Cited – Baytrust Holdings Ltd v Inland Revenue Commissioners 1971
Whether a scheme of arrangement constituted a reconstruction for stamp duty purposes. . .
Cited – In re Courage Group’s Pension Schemes Ryan v Imperial Brewing and Leisure Ltd ChD 1987
It was possible to amend the provisions of a pension scheme provided the amendments did not conflict with the purposes of the scheme. How was a court to identify such purposes: ‘It is trite law that a power can be exercised only for the purpose for . .
Cited – Fallon v Fellows (Inspector of Taxes) ChD 2001
The court considered whether a scheme was for the purposes of reconstruction or amalgamation in a capital gains tax context. Citing South African Supply: ‘In the context I think it is clear that when the learned judge referred to the persons . .
Cited – Oswald Tillotson Limited v ORC 1933
‘When I come to consider the purpose of this section, and to see why there is to be immunity and exemption from transfer stamp duty, I find that it is because the old company is really represented or replaced by the new company, and the shareholders . .
Cited – Re Tea Corporation CA 1904
A scheme was proposed in a liquidation and a meeting of, inter alia, ordinary shareholders was proposed, who were to be given shares in the new company in place of their shares in the old, so to that extent they were affected by the scheme. The . .
Cited – In re British and Commonwealth plc (No 3) ChD 1992
Bonds were subordinated in a winding up, and the company was in administration in which the administrators were proposing a scheme of arrangement. The judge was invited to apply the Tea Corporation principles in order to arrive at a conclusion that . .
Cited – In re Ocean Steam Navigation Company Limited ChD 1939
A petition was presented for the re-organisation of the company in circumstances in which, though it was was wholly insolvent, proposed a transfer of its entire undertaking to a new company, the shares in the new company being allotted to the . .
Cited – In re Maxwell Communications plc ChD 1993
It was argued that the pari passu distribution of assets among unsecured creditors was a general rule of insolvency law from which it was not possible to contract out, even to one’s own disadvantage, particularly by analogy with cases on set-off in . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 27 June 2022; Ref: scu.219692

Dyment v Boyden and others: CA 26 Nov 2004

Mrs D had gone into business with the respondents to operate a residential care home. It was to be run from premises owned by the respondents. The respondents inter alia had failed to disclose previous convictions, the registration was cancelled, and the company was insolvent. Heads of agreement with an attached draft lease had been agreed but a lease was not signed by the Mrs D. As the business collapsed, Mrs D began another business taking the home’s residents. The respondents claimed arrears of rent from Mrs D.
Held:
Held: It is in principle wrong that an intended party to a lease should be treated as bound at a time before he has committed himself to the lease merely because the other party has delivered the lease in escrow and the escrow conditions are subsequently satisfied. The appeal by the respondents failed.

Judges:

Lord Justice Peter Gibson Lord Justice Clarke and Lord Justice Keene

Citations:

[2004] EWCA Civ 1586, Times 02-Dec-2004

Links:

Bailii

Statutes:

Companies Act 1985 151, Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

Distinguished – Alan Estates Ltd v WG Stores Ltd and Another CA 1-Jul-1981
The proposed tenant wanted to get into possession, and was given a key and paid a quarter’s rent to the lessor’s solicitors to be held as stakeholders, before the lease had been formally granted. An undated lease and counterpart were executed and . .
Lists of cited by and citing cases may be incomplete.

Company, Landlord and Tenant

Updated: 27 June 2022; Ref: scu.219716

Speed Investments Limited, Slec Holdings LImited v Formula One Holdings Limited, Bambino Holdings Limited, Luc Argand, Emmanuele Argand-Rey: CA 12 Nov 2004

The applicants, shareholders in the company, sought to stay an action in England, saying the action had first been commenced in Switzerland.
Held: The issue was one of the internal management of the company. Though it did not relate to a matter of the constitution of the company it did relate to a shareholders agreement which concerned one of the main organs of the company. The company was registered in the UK, and the action should be heard here. The stay was refused.

Judges:

The Hon Mr Justice Neuberger Lord Justice Aldous Lord Justice Carnwath

Citations:

[2004] EWCA Civ 1512, Times 18-Nov-2004

Links:

Bailii

Statutes:

Lugano Convention 21

Jurisdiction:

England and Wales

Citing:

Appeal from – Speed Investments Ltd and Another v Formula One Holdings Limited and Others (No 2) ChD 20-Jul-2004
The defendants sought a stay of the action, arguing that proceedings had begun first in Switzerland.
Held: An English court became seised of an action for the purposes of the Convention at the time when the proceedings were served. Under the . .
Lists of cited by and citing cases may be incomplete.

Jurisdiction, Company

Updated: 27 June 2022; Ref: scu.219648

Agip (Africa) Ltd v Jackson: ChD 1990

The reference to ‘any wrongful act or omission’ in section 10 is not limited to torts or even to wrongs which were actionable at common law. ‘In paying or collecting money for a customer the bank acts only as his agent. It is otherwise, however, if the collecting bank uses the money to reduce or discharge the customer’s overdraft. In doing so, it receives the money for its own benefit.’ Secrecy is a badge of fraud.

Judges:

Millett J

Citations:

[1990] 1 Ch 265, [1991] 3 WLR 11

Statutes:

Partnership Act 1890 10

Jurisdiction:

England and Wales

Cited by:

Cited – Islamic Republic of Pakistan v Zardari and others ComC 6-Oct-2006
The claimant alleged that the defendants had funded the purchase of various properties by secret and unlawful commissions taken by them whilst in power in Pakistan. They sought to recover the proceeds. They now sought permission to serve proceedings . .
Cited – Clark v Cutland CA 18-Jun-2003
One director discovered that his co-director had withdrawn substantial sums from the company. . .
Lists of cited by and citing cases may be incomplete.

Company, Banking

Updated: 27 June 2022; Ref: scu.219200

Odebrecht Oil and Gas Services Ltd v North Sea Production Co Ltd: ChD 10 May 1999

Judges:

Dyson J

Citations:

Unreported, 10 May 1999

Jurisdiction:

England and Wales

Cited by:

Mentioned – Laminates Acquisition Co v BTR Australia Ltd ComC 31-Oct-2003
The claimant sought damages for breach of a company share sale agreement. The seller had given a warranty that it was not involved in any undisclosed litigation. An anti-trust investigation had been begun in the US.
Held: In this case the . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 27 June 2022; Ref: scu.187348

Re Bamford Publishers Ltd: ChD 2 Jun 1977

The Secretary of State sought the winding up of a company. The court considered the discretion to accept undertakings as to the company’s future conduct: ‘Quite clearly the Company has been engaged in a disreputable system of trading. The Company has offered a series of undertakings which are designed to secure that its future trading activities are free from objection. These undertakings are not acceptable to the petitioner. In case this matter goes to a higher court it may be helpful if I say something about the undertakings. First, the undertakings offered, assuming as I do that they were implemented, would in my view make the Company’s trading activities free from legitimate complaint however useless those trading activities may be from the point of view of the public interest. The reason that I reject the undertakings is this. Petitions under Section 35 of the Companies Act 1967 are common. Many petitions go by default. A few are opposed. If it were open to a company to oppose a petition under s.35 on the basis that undertakings are offered to regulate the future conduct of the company’s business, the Department of Trade would end with a mass of delinquent companies on probation. It is not the function of this Court, or at any rate of the Chancery Division, to police undertakings given to it except perhaps in the limited field of the welfare of infants. It is for the litigant to bring to the attention of the Court, if he so wishes but not otherwise, any activity which he considers a breach of an undertaking given to the Court If this Court accepted undertakings by a company, which is the object of a s.35 petition, there would be thrown upon the Department of Trade, and not upon the Court, the obligation of policing those undertakings. That is not the function of the Department. I take the view that the Court ought not to pay any attention to undertakings offered by a company, which is the object of a s.35 petition, relating to its future conduct owing to the burden which would thereby be thrown upon the Department of Trade, unless the Department is willing in a particular case that such undertakings should be accepted by the Court; and I do not think that the Department is under the smallest obligation to exhibit such willingness.’

Judges:

Brightman J

Citations:

Unreported, 2 June 1977

Statutes:

Companies Act 1985 35

Jurisdiction:

England and Wales

Cited by:

Applied – In the Matter of the Supporting Link; In the Matter of the Insolvency Act 1986 ChD 19-Mar-2004
The Secretary of State sought the winding up of the company. Directors offered undertakings as to their future behaviour.
Held: The Court should be slow to accept such undertakings unless the Secretary consented. The company was solvent, but . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 27 June 2022; Ref: scu.196722

Rodencroft Limited, W. G. Birch Developments Limited, H-M Birch Limited; Simon Allso v The Secretary for State for Trade and Industry: ChD 23 Apr 2004

The Secretary of state sought the winding up of the companies saying it was expedient in the public interest to do so. A shareholder opposed this saying that the companies were solvent.
Held: The shareholder had, in the absence of any position taken by the company, the standing to make the application, which was granted in respect of one company and refused for the other two. The rules did not envisage a shareholder appearing in such a case, but he should not be prevented from doing so in an appropriate case.

Judges:

The Hon Mr Justice Evans-Lombe

Citations:

[2004] EWHC 862 (Ch), Times 13-May-2004

Statutes:

Insolvency Act 1986 12A

Jurisdiction:

England and Wales

Citing:

Cited – Re Camburn Petroleum Products Ltd ChD 1979
The court heard a contributors’ petition. The directors were in deadlock with equal shareholdings. The petition was not making good progress, and a creditor’s petition was then issued. The shareholder sought a stay.
Held: There was a . .
Cited – Bows v Hope Life Insurance and Guarantee Co HL 1865
In the case of a creditor’s petition not opposed by other creditors: ‘I agree with what has been said, that it is not a discretionary matter with the court when a debt is established, and not satisfied, to say whether the company should be wound up . .
Cited – Xyllyx PLC (No1) ChD 1992
Two of the company’s contributories asked be added to the list for the purpose of obtaining a 7 day adjournment of the hearing of the petition so as to give them time to consider whether they wished to ask for substitution.
Held: An ordinary . .
Cited – Re Walter L Jacob Ltd CA 1989
Having authorised an enquiry under section 447, the Secretary of State presented a winding-up petition of the respondent, an authorised dealer in securities. The company had been obliged to cease trade by its regulatory body. The judge held that the . .
Cited – Re Rica Gold Washing Co 1879
A contributory, when petitioning for the winding up of a company, must plead in his petition and prove by evidence that, if a winding up order is made, there is a contingent surplus of assets in the winding up which will be available for . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 27 June 2022; Ref: scu.195973

Movitex v Bulfield: ChD 1988

The court considered a company’s articles of association which excused a director taking an interest in a contract with the company. The court treated the general exclusion of the self-dealing rule in the Articles as subject to the duty of the director to declare his interest in a transaction to be entered into by the company. The self-dealing rule was not excluded by the Articles, if the director’s interest was not disclosed in accordance with the Articles. The burden lies on the director to show that he made the necessary declaration. Vinelott J said: ‘a patch may be intentionally larger than the visible hole to which it is applied.’

Judges:

Vinelott J

Citations:

[1988] BCLC 104

Jurisdiction:

England and Wales

Cited by:

Cited – DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH v Koshy and Other (No 3); Gwembe Valley Development Co Ltd (in receivership) v Same (No 3) CA 28-Jul-2003
The company sought to recover damages from a director who had acted dishonestly, by concealing a financial interest in a different company which had made loans to the claimant company. He replied that the claim was out of time. At first instance the . .
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 – Hanoman v London Borough of Southwark CA 12-Jun-2008
The claimant had exercised the right to buy his flat from the defendant. After the lease had been executed he sought to assert that the price should have been further reduced to allow for rent disregarded by the defendant because it been covered by . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 27 June 2022; Ref: scu.187426

Interleasing (UK) Ltd v Morris: ChD 30 May 2002

On a share sale agreement, a retention was made with respect to a possible action. A clause in the agreement created a procedure for counsel’s opinion to be obtained as to its chances. The buyer obtained counsel’s opinion as provided.
Held: The defendant would not be allowed to go behind counsel’s opinion to challenge its basis or the instructions which led to it. It had been intended to act as a form of certificate to secure the money at issue until trial, and the only issue was as to whether it stood in the form agreed.

Judges:

Mr Justice Lightman

Citations:

Gazette 08-Aug-2002

Jurisdiction:

England and Wales

Company, Contract

Updated: 27 June 2022; Ref: scu.174458

Arthur D Little Ltd (in Administration) v Ableco Finance LLC: ChD 27 Mar 2002

The company was a subsidiary of two American companies, but was registered in Scotland. It charged its assets, but the charge was not registered in Scotland. On the insolvency of the company, the respondent chargee claimed it was a fixed charge not requiring registration. The administrators asserted that the charge was a floating charge and void if not registered.
Held: The schemes for registration of charges in the Act applied throughout the United Kingdom, and were not separate, even though the application of the machinery differed in each jurisdiction. Here however the charge was a fixed one, and valid.

Judges:

Mr Roger Kaye, QC

Citations:

Times 22-Apr-2002, Gazette 16-May-2002

Statutes:

Companies Act 1985 410

Jurisdiction:

England and Wales

Company, Scotland

Updated: 27 June 2022; Ref: scu.170068

Regina v Warrington Crown Court Chief Constable of Cheshire Constabulary, Ex Parte RBNB (A Company): HL 20 Jun 2002

The company refused to disclose the identity of its shareholders, when it applied for an alcohol license. The magistrates refused a licence it on the basis that the information was needed to assess the fitness of the company to hold the licence. The Crown Court refused the licence, but it was then granted on appeal. The police appealed.
Held: The shares were held through companies in such a way that the identity of the shareholders was not publicly ascertainable, and the court could not be sure that those controlling the company were appropriate. The appeal was refused. There was no extraneous reason to doubt the fitness of the proposed licensee. The term ‘a fit and proper person’ is to be construed according to the context. Questions about the eventual ownership of the owner were a distraction from the proposed licensee’s own fitness.

Judges:

Lord Bingham of Cornhill, Lord Mustill, Lord Hutton, Lord Millett and Lord Rodger of Earlsferry

Citations:

Times 21-Jun-2002, Times 01-Aug-2002, [2002] UKHL 24, (2003) 167 JPN 31, [2002] BCC 697, [2002] NPC 85, [2002] 1 WLR 1954, [2002] 4 All ER 131, (2003) 167 JP 6

Links:

House of Lords, Bailii

Jurisdiction:

England and Wales

Company, Licensing, Magistrates

Updated: 27 June 2022; Ref: scu.174014

WRM Group Limited (Formerly Known As WRM Logistics Limited) v Wood; Burcher; Wood; Chick and Irving: CA 21 Nov 1997

Breach of share sale agreement.

Judges:

Morritt LJ, Buxton LJ

Citations:

[1997] EWCA Civ 2802, [1998] CLC 189

Jurisdiction:

England and Wales

Citing:

Cited – Continental Illinois National Bank and Trust Company of Chicago v John Paul Papanicolaou (The Fedora) CA 1986
The court considered the effect of a guarantee clause.
Held: The provisions of the guarantee went to timing and cash flow rather than liability. A term excluding a right of set-off is not to be treated in the same way as an exclusion clause. . .
Cited – Coca-Cola Financial Corporation v Finsat International Ltd and Others CA 1-May-1996
Party may contract out of right of set-off. Issue justiciable under Order 14. . .

Cited by:

Cited – BOC Group Plc v Centeon Llc and Centeon Bio-Services Inc CA 29-Apr-1999
The court was asked whether a clause in a share sale agreement setting out the payment obligation worked to preclude the purchaser from exercising a right of set-off when the time comes to pay a later instalment of the price.
Held: The appeal . .
Cited – Barclays Bank Plc v Kufner ComC 10-Oct-2008
barclays_kufnerComC2008
The bank sought summary judgment under a guarantee to secure a loan to purchase a luxury yacht which was to be hired out in business. The loan had been charged against the yacht, but when the yacht was re-registered, the bank failed to re-establish . .
Lists of cited by and citing cases may be incomplete.

Company, Contract

Updated: 27 June 2022; Ref: scu.143201

Small and Others (Shiell’s Trustees) v Liquidators of Scottish Property Investment Co Building Society: HL 24 Nov 1884

The directors of a building society which had lent money on a postponed security, granted to a prior bondholder, in order to induce him to refrain from exposing the subjects to sale under the powers in his bond, a bond of corroboration, by which the society undertook along with the debtor the personal obligation for the debt due under the prior bond. The rules of the society gave no express power to grant such bonds. The society afterwards went into liquidation, and the liquidators sought to reduce the bond on the ground that it was ultra vires of the directors to grant it. Held ( aff. judgment of Second Division) that the bond of corroboration fell to be reduced

Judges:

Lord Chancellor, Lord Blackburn, and Lord Watson

Citations:

[1884] UKHL 139, 22 SLR 139

Links:

Bailii

Statutes:

Building Societies Act 1874 13

Jurisdiction:

Scotland

Banking, Company

Updated: 27 June 2022; Ref: scu.636749

Secretary of State for Business, Innovation and Skills v Pawson: ChD 27 Aug 2015

Trial of a claim by the Secretary of State to disqualify the defendant, a qualified chartered accountant and non-practising barrister from acting as a director of a company arising out of his conduct of the affairs of nine companies on public interest grounds.

Judges:

Hodge QC HHJ

Citations:

[2015] EWHC 2626 (Ch)

Links:

Bailii

Statutes:

Company Directors Disqualification Act 1986 8

Jurisdiction:

England and Wales

Company

Updated: 27 June 2022; Ref: scu.554296

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 follows:- ‘The difficulty with this analysis is that directors could commit a breach of duty if they exercised a power for the purpose of discriminating against a group of shareholders but not if they failed to consider the interests of that group of shareholders at all. Moreover, where the proposed act under consideration has different effects on different groups of shareholders in a company, it is difficult to apply the test that what is done must be done in the interests of the members generally, who are the company for this purpose (see Greenhalgh v Arderne Cinemas Ltd [1951] Ch 286; Parke v The Daily News Ltd [1962] Ch 927 at 963). The duty as formulated by Goulding J more accurately records what must be done to strike the right balance between conflicting sections of interest. It is in my judgment an accurate statement of the duty to which directors are subject in that situation. The duty is stated in very general terms; its content cannot be exhaustively defined but must depend on the facts of a particular case.’
and ‘However, in my judgment, it is not the effect of Re Saul D Harrison and Sons plc that a remedy under s 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 s 459 may in an appropriate case thus not be limited to those imposed by enactment or existing case law.’

Judges:

Arden J

Citations:

[1996] 1 BCLC 155

Jurisdiction:

England and Wales

Citing:

See Also – 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 . .

Cited by:

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

Company

Updated: 27 June 2022; Ref: scu.378390

In Re Edennote Ltd; Tottenham Hotspur plc v Ryman: ChD 1 Nov 1994

The company Edennote had been wound up on insolvency. It had a possible claim for fees against Tottenham, owned by Mr Sugare. The shareholder, Terry Venables, took an assignment of that action. An application was made to set aside the assignment and to remove the liquidator.
Held: The application succeeded. The assignment of the action had been against the expressed wishes of the creditors, who said that the action was worth more. The assignment was set aside and the liquidator was removed. The application to set the assignment aside could be commenced under either section 167 or 168.
A liquidator had to act in the interests of the general body of creditors, and might be removed if the creditors lost confidence in his ability to realise assets effectively and to pursue claims diligently.

Judges:

Sir John Vinelott

Citations:

[1995] 2 BCLC 248

Statutes:

Insolvency Act 1986 167(3) 168(5)

Jurisdiction:

England and Wales

Citing:

Applied – In re Keypak Homecare Ltd ChD 1987
The court considered an application under section 108 to remove the liquidator, and reviewed the case law on the topic: ‘The section authorises the court to remove the liquidator ‘on cause shown’. That is not the same as saying ‘if the court shall . .

Cited by:

Appeal from – In Re Edennote Ltd; Tottenham Hotspur plc v Ryman CA 21-May-1996
The company was in liquidation. Terence Venables, who had owned the shares, had taken an assignment of a cause of action against the football club. The court had set aside that assignment, and removed the liquidator. Venables now appealed saying . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 27 June 2022; Ref: scu.346691

Re INS Realisations Ltd: ChD 2006

The court has jurisdiction to set aside a schedule to an order containing a disqualification undertaking where ‘either some ground is shown which would be sufficient to discharge a private law contract or some ground of public interest is shown which outweighs the importance of holding a party to his agreement’.

Judges:

Hart J

Citations:

[2006] 2 All ER 902

Jurisdiction:

England and Wales

Cited by:

Cited – 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: 27 June 2022; Ref: scu.268104

in Re Atlantic Computers PLC: ChD 15 Jun 1998

Timothy Lloyd J summarised the authorities on the standard of misbehaviour to be shown to found disqualification of a company director and said: ‘ In order to disqualify a respondent the court has to be satisfied that he or she ‘has fallen below the standards of probity and competence appropriate for persons fit to be directors of companies’ . . This is a minimum standard . . It is also appropriate to recall that the purpose of the legislation is to improve the standard of conduct of company directors . . The point of a disqualification order is, by depriving the respondent of the liberty to take part in the management of a business carried on with the privilege of limited liability, to protect the public both from misconduct of a business by that director and also by a deterrent effect in relation to other company directors. . A consistent theme in the cases under the Act is that, while the Court must consider the extent of a respondent’s responsibility . . a director cannot avoid his responsibility by leaving the management to another or others.’

Judges:

Timothy Lloyd J

Citations:

Unreported, 15/06/1998

Jurisdiction:

England and Wales

Cited by:

Cited – Secretary of State for Business Enterprise and Regulatory Reform v Sullman and Another ChD 19-Dec-2008
An application was made to disqualify as a company director a former director of Claims Direct Limited. He had been accused of several actions which might justify a disqualification.
Held: The court found misconduct but delayed a decision on . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 27 June 2022; Ref: scu.279040

The Charit-Email Technology Partnership Llp v Vermillion International Investments Ltd: ChD 13 Feb 2009

Appeal of 94 individuals, who deny being contributories of a limited liability partnership (LLP) called Charit-Email Technology Partnership

Judges:

Sir Andrew Morritt Ch

Citations:

[2009] EWHC 388 (Ch), [2009] BPIR 762

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 27 June 2022; Ref: scu.317907

Bamber v Eaton: ChD 6 Oct 2004

The claimant was a shareholder who felt that the affairs of the company were being conducted in a manner unfairly prejudicial to his interests. He began his action by a claim accompanied by particulars of claim. The defendants argued that the action should have been begun by petition, and that the defect could not be cured by amendment and should be struck out.
Held: The requirement to proceed by petition was mandatory and not merely directory. The provision in CPR allowing amendments referred only to the curing of defects in compliance with CPR, and not to a statutory failure. The power of amendment would not allow a claim to be transformed into a petition.

Judges:

Pumfrey J

Citations:

Times 22-Oct-2004

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Company

Updated: 27 June 2022; Ref: scu.220022

In the Matter of British American Racing (Holdings) Limited; In the Matter of the Insolvency Act 1986: ChD 16 Dec 2004

The company raced in the Formula 1 series. Its main sponsors had been British American Tobacco, but because of restrictions of tobacco advertising, the company lost substantial revenue and fell in to loss, and entered into an individual voluntary arrangement. It had just signed a new joint venture agreement with Honda, when BAT called in its loan. BAT sought an administration order. Mount Eagle a smaller shareholder refused to sell out and opposed the application, saying the administration was not sought in good faith.
Held: The debts were substantial, and the shares had no independent value. The proposal would allow for payment of the company’s debts. Administrators would have a duty to te court to act fairly, and the an order would not be unfair. The application was not an abuse.

Judges:

Lord Justice Evans-Lombe

Citations:

[2004] EWHC 2947 (Ch)

Statutes:

Insolvency Act 1986

Jurisdiction:

England and Wales

Citing:

Cited – Re a Company No 001573 of 1983 ChD 1983
The court was presented with a petition of a creditor to wind up a company. The company had leasehold premises which contained a provision for forfeiture of the lease in the event of such a petition. The petitioner had agreed with the company’s . .
Cited – Re Bugle Press Ltd CA 2-Jan-1961
Shareholders with over 90% of the issued shares sought to acquire the remaining shares, and create another company to do so. That company offered to purchase the shares at a valuation. The majority shareholders accepted but the minority shareholder . .
Cited – Re Bugle Press Ltd ChD 1961
Two shareholders held more than 90% of the issued shares of the company. To get rid of the holder of the remaining shares, they incorporated another company for the purpose of acquiring all the shares of the company. The acquiring company offered to . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 27 June 2022; Ref: scu.220954

Bednash v Hearsey: CA 15 May 2001

Excessie Directors pay recoverable on insolvency

The liquidator sought permission to appeal against rejection of its claim for repayment of sums by a director who, he said, had been paid excessive amounts. The claim had een rejected because at th time of payments, the company had not been insolvent.
Held: The court approved the statement of law at first instance: ‘While a company is not actually insolvent and is continuing to trade, directors deciding what to pay themselves must strike a fair balance, taking into account the value of their services to the company, the position on creditors, the company’s overall state and the availability of funds to make the payments. Reasonable latitude must be allowed before the court will say that payments to directors are so irresponsible as to have constituted a breach of their fiduciary duties; and it would take exceptional circumstances before they would be expected (if they ever were) to suspend their own remuneration altogether.’

Judges:

Potter LJ,Sir Martin Nourse

Citations:

[2001] EWCA Civ 787

Links:

Bailii

Jurisdiction:

England and Wales

Company, Insolvency

Updated: 27 June 2022; Ref: scu.218150

Hurst v Crampton Bros (Coopers) Ltd and others: CA 9 Aug 2002

Adjourned application for permission to appeal

Judges:

Chadwick LJ

Citations:

[2002] EWCA Civ 1384

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Pennington 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, . .

Cited by:

See Also – Pennington and others v Crampton and others CA 17-Jun-2004
Application for permission to appeal against proposal of Tomlin Order . .
Lists of cited by and citing cases may be incomplete.

Wills and Probate, Company

Updated: 27 June 2022; Ref: scu.217528

Bhullar and others v Bhullar and others: CA 26 Sep 2002

Renewed application for leave to appeal

Judges:

Arden LJ

Citations:

[2002] EWCA Civ 1509

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

See Also – Bhullar 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 . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 27 June 2022; Ref: scu.217560

Glencore International Ag v Metro Trading International Inc and others: CA 31 Jul 2002

Claimant’s application for security for costs of defendant’s cross cross appeal.

Judges:

Tuckey LJ

Citations:

[2002] EWCA Civ 1252

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Glencore International AG v Metro Trading International Inc and others ComC 1-Aug-2001
Under English conflicts of laws rules the transfer of title to movable property is governed by the law of the place where the property is situated.
Moore-Bick J commented obiter on a dictum of Millett J in Macmillan: ‘However, if the lex situs . .
Lists of cited by and citing cases may be incomplete.

Company, Costs

Updated: 23 June 2022; Ref: scu.217404

In Plus Group Ltd v Pyke: CA 6 Feb 2002

P was a director of In Plus. However, he had fallen out with his co-director; and had been effectively excluded from the management of the company. While still a director, he set up his own company which entered into contracts on its own behalf with a major customer of In Plus. In so doing, he used no property belonging to In Plus and made use of no confidential information which had come to him as a director of In Plus.
Held: he was not in breach of his fiduciary duties to In Plus, even though he remained a de jure director of it. The two strands of the fundamental rule that obliged fiduciaries to account for personal benefit or gain had two separate themes were labelled the ‘no conflict rule’ and the ‘no profit rule’. They must be considered separately. Sedley LJ: ‘Quite exceptionally, the defendant’s duty to the claimants had been reduced to vanishing point by the acts (explicable and even justifiable though they may have been) of his sole fellow director and fellow shareholder Mr Plank. Accepting as I do that the claimants’ relationship with Constructive was consistent with successful poaching on Mr Pyke’s part, the critical fact is that it was done in a situation in which the dual role which is the necessary predicate of [the claimants’] case is absent. The defendant’s role as a director of the claimants was throughout the relevant period entirely nominal, not in the sense in which a non-executive director’s position might (probably wrongly) be called nominal but in the concrete sense that he was entirely excluded from all decision-making and all participation in the claimant company’s affairs. For all the influence he had, he might as well have resigned.’ and (Brooke LJ) ‘There is no completely rigid rule that a director may not be involved in the business of a company which is in competition with another company of which he was a director.’
Brooke LJ: ‘The governing principles in this type of case are found in what are sometimes called the no conflict rule and the no profit rule. The judgment of Malins V-C in Imperial Mercantile Credit Association (liquidators) v Coleman (1871) 6 Ch App 558 at 563 represents an early statement of the relevant principles. Under the former rule, certain consequences can flow if directors place themselves in a position where their personal interests or duties to other persons are liable to conflict with their duties to the company of which they are directors unless the company gives its informed consent. Under the latter, directors are not permitted to retain secret profits which they make by using information or property or opportunities which belong to their company. Even if their company would not itself have benefited from the opportunity, equity treats the profits which the director, or former director, has made as property which he is under a duty to pay over to the company which he has betrayed by his disloyalty.’

Judges:

Sedley LJ, Brooke LJ, Jonathan Parker LJ

Citations:

[2002] EWCA Civ 147, [2002] 2 BCLC 201

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Doubted – London 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:

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: 23 June 2022; Ref: scu.216794

Wolff and Muller GmbH and Co. KG contre Jose Filipe Pereira Felix: ECJ 12 Oct 2004

ECJ (Judgment) Article 49 EC – Restrictions on freedom to provide services – Companies in the construction sector – Subcontracting – Obligation on an undertaking to act as guarantor for the minimum remuneration of workers employed by a subcontractor

Citations:

C-60/03, [2004] EUECJ C-60/03

Links:

Bailii

Jurisdiction:

European

Company, Construction

Updated: 23 June 2022; Ref: scu.216598

Trident International Limited v Barlow: ChD 27 Feb 1998

Judges:

Eben Hamilton QC

Citations:

[1998] 2 BCLC 164

Statutes:

Insolvency Act 1986 11(3)(c)

Jurisdiction:

England and Wales

Cited by:

Appeal from – Trident International Limited v Barlow; Hughes and Goodman (the Joint Administrators of Hamley Plc and Jeffrey (Rogers) Imports Limited CA 30-Jul-1999
A contractual possessory lien, coupled with a right to sell and use the proceeds to discharge the customer’s outstanding indebtedness was not a floating charge because the company did not purport to have any right to exercise any right to take . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 23 June 2022; Ref: scu.414894

Attorney-General for Tuvalu v Philatelic Distribution Corporation Ltd: CA 1990

Where a company is ordered not to do certain acts or gives an undertaking to the like effect and a director of that company is aware of the order or undertaking he is under a duty to take reasonable steps to ensure that the order or undertaking is obeyed, and that if he wilfully fails to take those steps and the order or undertaking is breached he can be punished for contempt. It is his own culpable conduct which exposes him to that liability.
Woolf LJ said: ‘In our view where a company is ordered not to do certain acts or gives an undertaking to like effect and a director of that company is aware of that order or undertaking he is under a duty to take reasonable steps to ensure that the order or undertaking is obeyed, and if he wilfully fails to take those steps and the order or undertaking is breached he can be punished for contempt. We use the word ‘wilful’ to distinguish the situation where the director can reasonably believe some other director or officer is taking those steps.’

Judges:

Woolf LJ

Citations:

[1990] 1 WLR 926

Jurisdiction:

England and Wales

Cited by:

Cited – Beggs v Scottish Ministers HL 7-Feb-2007
The claimant, a serving prisoner, had sought to sue the prison authorities for the conditions in which he was kept. He complained that his correspondence with his lawyers had been unlwafully opened by the prison. Repeatedly, undertakings were given . .
Cited – Sectorguard Plc v Dienne Plc ChD 3-Nov-2009
The claimant alleged misuse of confidential information in the form of its customer list, and its charges to them. The defendant company was run by former employees of the claimant. A later allegation was made of accessing the defendant’s private . .
Lists of cited by and citing cases may be incomplete.

Contempt of Court, Company

Updated: 23 June 2022; Ref: scu.248817

Revenue and Customs Commissioners v Pal and Others: ChD 31 Jul 2006

The taxpayers had challenged an assessment to VAT saying that they were not actually partners in the company assessed. The revenue countered to say that they had signed the registration form to say that they were partners. The revenue now appealed a decision in the taxpayers’ favour.
Held: The appeal failed. The partners were partners at common law or under the 1890 Act only. S45 of the 1994 Act required an actual partnership. The holding themselves out as partners when signing the VAT registration form was not sufficient to make them partners.

Judges:

Patten J

Citations:

Times 29-Aug-2006

Statutes:

Partnership Act 1890 14, Value Added Tax Act 1994 45(1)

Jurisdiction:

England and Wales

Citing:

Cited – In re C and M Ashberg 17-Jul-1990
An estoppel by representation could not be used to establish satisfaction of a stautory condition. . .
Lists of cited by and citing cases may be incomplete.

VAT, Company, Estoppel

Updated: 23 June 2022; Ref: scu.244744

Feetum and Other v Levy and Others: ChD 5 Jan 2005

The applicants sought a declaration that the appointment of the defendants as administrative receivers of the company, a limited liability company, was precluded by the 1986 Act.
Held: The administrator had been appointed under a debenture, but the section precluded such appointments by proprietors of a floating charge unless one of the exceptions specified arose, particularly where the project company was a financed project and included step-over rights. There was no reason to limit the scope of the term ‘project’ within the Act to construction projects. The scheme was a project within the definition, but it was not ‘financed’ since at the time of the incurring of the debt, it was not expected that the borrowings would exceed andpound;50 million. Tthough the receivers were appointed by the Act, they operated as agents of the borrowers. It was not a financed project, and the exceptions allowing the appointment did not apply.

Judges:

Lewison J

Citations:

Times 24-Feb-2005

Statutes:

Insolvency Act 1986 72A

Jurisdiction:

England and Wales

Cited by:

Appeal from – Feetum v Levy CA 2006
Jonathan Parker LJ discussed the granting of declarations: ‘things have indeed moved on since the Meadows case was decided; and the courts should not nowadays apply such a restrictive meaning to the passage in Lord Diplock’s speech in Gouriet’s . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 23 June 2022; Ref: scu.223013

Sybron 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 scheme provided for different payments according to whether or not the member of the scheme was dismissed for fraud or serious misconduct.
Held: An employee has no duty to disclose to his employers his own misconduct but he had been under a duty to disclose a fraudulent misconduct of the subordinate employees with whom he had acted, even though that disclosure would have revealed his own misconduct to his employers. There is no general duty to report a fellow servant’s misconduct or breach of contract but whether there is such a duty depends on the contract or the terms of employment of the particular servant. It is therefore a question of the status of the relevant employee.

Citations:

[1983] 2 All ER 706, [1984] Ch 112

Jurisdiction:

England and Wales

Cited by:

Cited – Horcal 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 . .
Cited – Tesco 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.
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 . .
Lists of cited by and citing cases may be incomplete.

Company, Employment

Updated: 23 June 2022; Ref: scu.194877

Base Metal Trading Ltd v Shamurin: CA 14 Oct 2004

The claimant sought damages from what were said to be speculative trades carried out by the defendant whilst working in Russia. The claims were in both equity and in tort. He was a director of the company which was incorporated in Guernsey.
Held: If the acts complained of did not relate to the constitution of a company, it must relate to its internal management. Where the claim related to the duties inherent in the office of director, the claim should be heard in the place of incorporation wherever the acts complained of took place. Russian law was applicable for the claim in tort, but Guernsey, where the company was incorporated, was the proper law of the claim in equity.

Judges:

Lady Justice Arden Lord Justice Tuckey Mr Justice Newman

Citations:

[2004] 4 All ER 1, [2004] EWCA Civ 1316, Times 01-Nov-2004

Links:

Bailii

Statutes:

Contracts (Applicable Law) Act 1990

Jurisdiction:

England and Wales

Citing:

Appeal from – Base Metal Trading Ltd v Shamurin ComC 22-Oct-2003
. .
Cited – Cordoba Shipping Co Ltd v National State Bank, Elizabeth, New Jersey (The Albaforth) CA 1984
A negligent misrepresentation was made in a telex sent from the United States but received and acted upon in England. The judge had set aside leave to serve the document out of the jurisdiction.
Held: The appeal succeeded. The transmission was . .
See Also – Base Metal Trading Ltd v Shamurin ComC 21-Nov-2001
. .

Cited by:

Cited – Harding v Wealands CA 17-Dec-2004
The claimant sought damages here for a road traffic accident which had occurred in Australia. The defendant was working in England. The defendant argued that the law of New South Wales applied.
Held: The general rule in section 11 was not to . .
Lists of cited by and citing cases may be incomplete.

Company, Jurisdiction, Equity

Updated: 21 June 2022; Ref: scu.216419

Customs and Excise v Anglo Overseas Ltd: ChD 5 Oct 2004

Judges:

The Honourable Mr Justice Lewison

Citations:

[2004] EWHC 2198 (Ch), [2005] BPIR 137

Links:

Bailii

Statutes:

Excise Duty Points (Duty Suspended Movements of Excise Goods) Regulations 2001

Jurisdiction:

England and Wales

Cited by:

Cited – Re Autotech Design Ltd, HMRC v Autotech Design Ltd ChD 2006
Michael Briggs QC summarised the approach to be adopted by the court at the hearing of for the appointment of an interim liquidator pending the hearing of an insolvency petition brought by the Revenue: ‘Although the formulations of the approach to . .
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.

Customs and Excise, Company, Insolvency

Updated: 21 June 2022; Ref: scu.215859

Re Camburn Petroleum Products Ltd: ChD 1979

The court heard a contributors’ petition. The directors were in deadlock with equal shareholdings. The petition was not making good progress, and a creditor’s petition was then issued. The shareholder sought a stay.
Held: There was a sufficient allegation of insolvency in the petition, and it was right that the petition should be allowed to continue. A creditor in the circumstances mentioned is prima facie entitled to his order and is prima facie not bound to give time to enable the debtor to pay.
Slade J said: ‘On April 30th 1979 Chevron’s [the petitioner in the creditor’s petition] petition came before me for first hearing. I was then told of the petition pending in the Manchester District Registry, but was told that for practical purposes proceedings under that petition were frozen . . Counsel for Chevron asked for an order under section 231 of the Companies Act 1948 giving leave to Chevron, so far as leave might be necessary to proceed with its petition, and also for an appropriate adjournment for the purpose of dealing with evidence. Counsel for Mr Cooper [one of the director shareholders] asked for leave to be added to the list out of time on the usual undertaking and opposed the making of any order under section 231.
After hearing argument I decided, contrary to the submissions made on behalf of Mr Cooper, that there was a sufficient allegation of insolvency in the petition, and that in all the circumstances it was right that Chevron’s petition should be allowed to continue. I therefore made the order sought under section 231and gave certain further directions to which I need not refer.’
and ‘In my judgment, on the facts which I have summarised, the company was at the date of presentation of Chevron’s petition and is at the present date manifestly unable to pay its debts within the meaning of section 222(e) and section 223(d) [of the 1948 Act] in as much as it did not and does not have assets available for the discharge of all its current liabilities. Miss Arden on behalf of Chevron, and Mr Cone, on behalf of Mr Kreike [the other director shareholder] who supports Chevron’s petition, thus affirm and rely on the present inability of the company to pay its debts. Mr Mann, who opposes the petition on behalf of Mr Cooper does not dispute such inability . .’
Slade J discussed section 346 of the 1948 Act, saying: ‘Thus I think the Brighton Hotel Company decision throws light on the attitude which the court should generally adopt if faced with a request to make a winding up order in respect of a company shown to be unable to pay its debts, when that request is made by an undisputed unpaid creditor but opposing contributories seek an adjournment. Though there are a number of authorities which give guidance as to the attitude of the court where some creditors support the making of an immediate winding up order and other creditors oppose it, counsel have been unable to find any authority which gives guidance as to such attitude where the contest is between a petitioning creditor on the one hand and contributories on the other hand. I do not however feel much doubt in principle as to what that attitude should be. In the case of a creditor’s petition not opposed by other creditors, the general approach of the court was expressed by Lord Cranworth in Bows v Hope Life Insurance and Guarantee Co [1865] 11 HLCas 389,402:
‘I agree with what has been said, that it is not a discretionary matter with the court when a debt is established, and not satisfied, to say whether the company should be wound up or not; that is to say if there be a valid debt established, valid both at law and in equity. One does not like to say positively that no case could occur in which it would be right to refuse it; but, ordinarily speaking, it is the duty of the court to direct the winding up.’
In other words a creditor in the circumstances mentioned is prima facie entitled to his order and is prima facie not bound to give time to enable the debtor to pay. In my judgment, subject to the discretion given to it by sections 225 and 346 of the Companies Act 1948, to which I have already referred, the attitude of the court should be, and is, essentially unchanged today. While I recognise that it would have the right under those two sections to pay regard to the wishes of contributories, in deciding whether or not to make a winding up order on a creditors petition, or to adjourn the hearing, in my judgment it can, and should ordinarily attach little weight to the wishes of contributories, in comparison with the weight it attaches to the wishes of any creditor, who proves both that he is unpaid and that the company is ‘unable to pay its debts’.
For these reasons while I accept that the court would have jurisdiction to adjourn Chevron’s petition, as asked for by Mr Mann, I think it should only do so if it were satisfied that there were exceptional circumstances that justified this course.’

Judges:

Justice Slade

Citations:

[1979] 3 All ER 297, [1980] 1 WLR 86

Statutes:

Companies Act 1948 231 346(1), Insolvency Act 1986 195(1)(a) 346(1)

Jurisdiction:

England and Wales

Citing:

Cited – Bows v Hope Life Insurance and Guarantee Co HL 1865
In the case of a creditor’s petition not opposed by other creditors: ‘I agree with what has been said, that it is not a discretionary matter with the court when a debt is established, and not satisfied, to say whether the company should be wound up . .

Cited by:

Cited – Rodencroft Limited, W. G. Birch Developments Limited, H-M Birch Limited; Simon Allso v The Secretary for State for Trade and Industry ChD 23-Apr-2004
The Secretary of state sought the winding up of the companies saying it was expedient in the public interest to do so. A shareholder opposed this saying that the companies were solvent.
Held: The shareholder had, in the absence of any position . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 21 June 2022; Ref: scu.197019

In re London and Globe Finance Corporation Ltd: ChD 1903

A company which had gone from voluntary winding up, first to winding up under supervision and then to compulsory winding up, with the official receiver as liquidator. The company’s former managing director was suspected of fraud, but the law officers declined to prosecute. Some of the shareholders wished to prosecute him, mainly at the expense of the company’s assets (although they offered to pay into court at least andpound;1,250 of their own money) while others opposed the prosecution as a waste of money.
Held: The court authorised the liquidator, the official receiver, to do so at the expense of the company. Buckley J said: ‘the general scheme of the Acts with reference to the liquidation of a company no doubt is that the assets are to be realised to the best advantage for the benefit of those who are entitled to share in their distribution. But indications are not wanting that the assets may under the Acts be applied for some purposes other than these. Section 167 of the [1862 Act] is, having regard to the reasons which I have just given, one example of this, and in the [1890 Act] the same intent may be traced in sections 7 and 8 of that Act. These are sections which require the preparation of a statement of the company’s affairs at the expense of the assets leading to a preliminary report, which is to show whether further inquiry is desirable as to matters relating to the promotion and the like, and, if necessary, to a public examination of parties incriminated, with the purpose, of course, of enforcing commercial morality. It is, therefore, in my judgement plain that the principle upon which I am to apply, or refuse to apply, section 167 is not measured or limited or even concerned with pecuniary benefit to be obtained for the shareholders or creditors.’
and
‘ To deceive is, I apprehend, to induce a man to believe that a thing is true which is false, and which the person practising the deceit knows or believes to be false. To defraud is to deprive by deceit: it is by deceit to induce a man to act to his injury. More tersely it may be put, that to deceive is by falsehood to induce a state of mind ; to defraud is by deceit to induce a course of action.’

Judges:

Buckley J

Citations:

[1903] 1 Ch 728

Statutes:

Companies Act 1862 167

Jurisdiction:

England and Wales

Cited by:

Cited – Official Receiver v Wadge Rapps and Hunt (a firm) and another and two other actions HL 31-Jul-2003
(Orse In re Pantmaenog Timber Co Ltd)
The Receiver sought to use information obtained under section 236 (documents recovered from the directors’ solicitors) in disqualification proceedings.
Held: The appeal succeeded. The Act had . .
Cited – Director of Public Prosecutions v Ray HL 25-Jul-1973
The defendant ordered a meal at a restaurant believing his companion would lend him the money to pay. He later decided to seek to avoid payment and took a opportunity to escape.
Held: The appeal was allowed and the conviction restored. The . .
Questioned – Welham v Director of Public Prosecutions HL 1961
The House considered what was required to establish an ‘intent to defraud’.
Held: Lord Radcliffe said: ‘Now, I think that there are one or two things that can be said with confidence about the meaning of this word ‘ defraud ‘. It requires a . .
Mentioned – Scott v Metropolitan Police Commissioner; Regina v Scott HL 20-Nov-1974
The defendant had been accused of conspiracy to produce pirate copies of films obtained by purchasing copies from cinema owners without the knowledge or consent of the copyright owners.
Held: To establish a conspiracy to defraud, it was not . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency, Crime

Updated: 21 June 2022; Ref: scu.186357

Gadd and Others v Gadd and Another: ChD 7 Feb 2002

Surviving partners, members of his family sought to exercise an option contained in the partnership deed for the purchase of his interest in the farm. The deed had set the value as that appearing in the last previous farm accounts, but required a balance sheet to be drawn. The farm had been shown in the accounts at its historic purchase cost, and failed to reflect its current value. Other members of the family sought to use the market value.
Held: Each partnership deed must be construed in its own context. The parties had not focused on the question when the accounts had been drawn, and the use of the historical value was a mere convenience. The deed required a balance sheet to be drawn up, and that indicated that an open market value was appropriate.

Judges:

Jules Cher QC

Citations:

Gazette 21-Feb-2002, Gazette 28-Feb-2002

Jurisdiction:

England and Wales

Company

Updated: 21 June 2022; Ref: scu.167651

Slater Ltd and Others v Beacontree General Commissioners and Another: ChD 6 Dec 2001

When the general commissioners were investigating an appeal against the imposition of penalties, it was open to them to ask the company to present more detailed accounts than would be provided under the rules which allowed smaller companies to file short accounts. It was not enough to offer access to the companies books. The commissioners were entitled to require a profit and loss account in one of the four statutory formats. The defaults in this case were deliberate, and inexcusable, and the penalties should be sufficiently substantial to mean something. The penalties here were modest and the companies could make no legitimate complaint of them.

Judges:

Justice Lightman

Citations:

Times 18-Dec-2001, Gazette 06-Feb-2002

Statutes:

Companies Act 1985 248, General Commissioners (Jurisdiction and Procedure) Regulations 1994 (1994 No 1812) 10(3)

Jurisdiction:

England and Wales

Taxes Management, Company, Corporation Tax

Updated: 21 June 2022; Ref: scu.167112

City of London Group Plc and Another v Lothbury Financial Services Ltd and Others: ChD 8 Nov 2012

Claims for declarations, accounts, damages and injunctive relief for alleged breach of fiduciary duty, passing off, conversion, money had and received and conspiracy.

Judges:

Proudman J

Citations:

[2012] EWHC 3148 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Company, Torts – Other

Updated: 21 June 2022; Ref: scu.465891