Category: Company

The Commissioners of Inland Revenue v Rysaffe Trustee Company (CI) Limited: CA 20 Mar 2003

The taxpayers had repeatedly settled shares in the taxpayer company in foreign trusts. The Commissioners sought to use the special legislative regime, imposing a periodic charge to Inheritance Tax on discretionary trusts.
Held: Inheritance Tax should be calculated on the basis that each brother made five separate settlements; s 43 of the 1984 Act does not entitle the CIR to treat five settlements as if they were one settlement.

Judges:

Lord Justice Mummery Lord Justice Dyson Lord Justice Schiemann

Citations:

[2003] EWCA Civ 356, Times 29-Apr-2003, Gazette 05-Jun-2003

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 43

Jurisdiction:

England and Wales

Citing:

Appeal from – The Commissioners of Inland Revenue v Rysaffe Trustee Company (Ci) Limited ChD 31-May-2002
The taxpayers had placed shares in the defendant company in foreign trusts.
Held: Under the general law, each brother had made five separate settlements; that s 43 did not reduce the five settlements to one settlement; that there were five . .

Cited by:

Appealed to – The Commissioners of Inland Revenue v Rysaffe Trustee Company (Ci) Limited ChD 31-May-2002
The taxpayers had placed shares in the defendant company in foreign trusts.
Held: Under the general law, each brother had made five separate settlements; that s 43 did not reduce the five settlements to one settlement; that there were five . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Company

Updated: 07 June 2022; Ref: scu.179911

Lankhorst-Hohorst GmbH v Finanzamt Steinfurt: ECJ 12 Dec 2002

German law taxed interest paid on loan repayments made by a company against a loan from a shareholder, but only where the shareholder was not resident in the same country as the company. The tax authority took the view that the payments were a equivalent to a covert distribution of profits.
Held: This was discriminatory, and offended the principal of freedom of establishment. It was wrong to compare the position of a company trading for profit with corporations exempt from corporation tax. Reduction in tax revenue is not an overriding reason in the public interest capable of justifying a measure contravening a fundamental principle.

Judges:

Wathelet, President, Timmermans, Edward, Jann and Rosas JJ

Citations:

Times 27-Dec-2002, C-324/00, [2002] EUECJ C-324/00, [2002] ECR I-11779, [2003] STC 607

Links:

Bailii

Jurisdiction:

European

Cited by:

Cited – Foulser and Another v HM Inspector of Taxes ChD 20-Dec-2005
The taxpayer company entered into an arrangement in which shares were purchased by a company based in Ireland and resold. A claim was made for holdover relief.
Held: The scheme failed. The restriction imposed did not infringe the right of . .
Lists of cited by and citing cases may be incomplete.

European, Corporation Tax, Company

Updated: 06 June 2022; Ref: scu.178612

Inland Revenue Commissioners v Sema Group Pension Scheme Trustees: CA 19 Dec 2002

The taxpayers appealed a notice under section 703(3) to counteract the tax advantage received by them from a share buy-back scheme. The scheme was an approved pension scheme, under which the quoted company agreed to buy back its own shares.
Held: The excess paid over the market value by the company was to be treated as a qualifying distribution under section 231, creating a tax credit. Under Joiner section 703 was not primarily targeted at contrived transactions, but rather at all forms of tax avoidance within its scope. What had to be considered was the normality of the amount paid, but that was not judging a distribution as against a normal dividend, but a qualifying distribution of a different kind. The judge had asked himself the wrong question. Appeal allowed.

Judges:

Aldous, Jonathan Parker, Aikens LJJ

Citations:

Times 17-Jan-2003, Gazette 13-Mar-2003, [2002] EWCA Civ 1857

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 592 703(1) 704A 709

Jurisdiction:

England and Wales

Citing:

Cited – Inland Revenue Commissioners v Joiner HL 26-Nov-1975
HL Surtax – Tax advantage – Transaction in securities – Company recon- struction – Surplus assets o f old company distributed in voluntary liquidation – Agreement for liquidation providing for agreed methods o f . .
Appeal from – Inland Revenue Commissioners v Sema Group Pension Scheme Trustees ChD 7-Feb-2002
The Trustees of an exempt approved pension scheme bought shares, and sold them at a lower price to the company. Under the 1988 Act, this operated to create a tax credit. The revenue issued a notice and assessment under Schedule F to defeat that tax . .
Cited – Lomax v Peter Dixon and Son Ltd CA 1942
A substantial loan was made to be repaid on demand. An agreement was then made where the debtor issued to the creditor 680 loan notes of andpound;500 each, amounting in total to andpound;340,000 (a discount of 6%). The notes were to bear interest at . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Company

Updated: 06 June 2022; Ref: scu.178700

Unilever (UK) Holdings Ltd v Smith (Inspector of Taxes): CA 11 Dec 2002

The company entered into an approved scheme of arrangement under which the entire preference shares were cancelled. The company appealed a refusal to recognise the arrangement as a re-organization of the company with a deemed disposal and re-acquisition of the holdings of the shares at market value.
Held: It was of the essence of a reorganization that there should be a new share-holding. None such had been created. The ordinary shares left were not a new holding, there was no acquisition, and the cancellation of the preference shares did not work to revalue the shareholdings.

Judges:

Lord Justice Auld, Lord Justice Clarke, Lord Justice Jonathon Parker

Citations:

Times 22-Jan-2003, [2002] EWCA Civ 1787

Links:

Bailii

Statutes:

Companies Act 1948 206, Taxation of Chargeable Gains Act 1992 126(1)

Jurisdiction:

England and Wales

Company, Capital Gains Tax

Updated: 06 June 2022; Ref: scu.178452

Shierson and Another v Rastogi and Another: CA 9 Nov 2002

Company directors in an insolvent liquidation faced proceedings by the liquidators. They resisted providing additional evidence under examination by the liquidators.
Held: The sections under the 1986 Act should be read together. Where a director faced serious charges, requiring him to provide evidence against himself would be oppressive. The existence of such proceedings must be a major factor in deciding whether to order examination, and so also was the fact that they were directors. Even so, it was a balancing exercise for each case.

Judges:

Peter Gibson, Mance, Hale LJJ

Citations:

Times 20-Nov-2002, Gazette 16-Jan-2003, [2002] EWCA Civ 1624

Links:

Bailii

Statutes:

Insolvency Act 1986 235 236

Jurisdiction:

England and Wales

Company, Insolvency

Updated: 06 June 2022; Ref: scu.178246

Develop Baudurchfuhrungs- und Stadtentwicklungs GmbH v Finanzlandesdirektion fur Wien, Niederosterreich und Burgenland: ECJ 17 Oct 2002

ECJ Reference for a preliminary ruling: Verwaltungsgerichtshof – Austria. Directive 69/335/EEC – Indirect taxes on the raising of capital – Capital duty – Contribution of assets of any kind – Meaning – Payments made by the parent company of a company which has acquired dividend certificates issued by a capital company

Citations:

C-71/00, [2002] EUECJ C-71/00

Links:

Bailii

Statutes:

Directive 69/335/EEC

European, Company, Taxes – Other

Updated: 06 June 2022; Ref: scu.177468

Riccardo Prisco Srl v Amministrazione delle Finanze dello Stato; and Ministero delle Finanze v CASER SpA: ECJ 10 Sep 2002

References for a preliminary ruling: Tribunale di Milano and Corte d’appello di Roma – Italy. Directive 69/335/EEC – Indirect taxes on the raising of capital – Articles 10 and 12(1)(e) – Register of companies – Registration of companies’ instruments of incorporation and other company documents – Recovery of sums paid but not due – Procedural time-limits under national law – Interest.

Citations:

C-216/99, C-222/99, [2002] EUECJ C-216/99, [2002] EUECJ C-222/99

Links:

Bailii, Bailii

Jurisdiction:

European

Company

Updated: 06 June 2022; Ref: scu.177338

Energie Steiermark Holding AG v Finanzlandesdirektion fur Steiermark: ECJ 17 Oct 2002

ECJ Reference for a preliminary ruling: Verwaltungsgerichtshof – Austria. Directive 69/335/EEC – Indirect taxes on the raising of capital – Capital duty – Increase in a company’s capital by the issue of new shares – Payments made upon the entry of a new member as a shareholder in the company – Payments made by the parent company of the new member – Payments made to the subsidiaries of the company increasing its capital – Payments not yet made.

Citations:

C-339/99, [2002] EUECJ C-339/99

Links:

Bailii

Statutes:

Directive 69/335/EEC

European, Company, Taxes – Other

Updated: 06 June 2022; Ref: scu.177467

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 refused. The new company gave notice to exercise the statutory power of compulsory acquisition under the section. The minority shareholder said that the transferee was not entitled to acquire his shares despite the approval of 9/10ths of the shareholder, and said the offer undervalued his shares. The majority did not file any evidence verifying their valuation. The court at first instance granted the declaration, saying the connection between the acquiring company and the majority shareholders was an exception.
Held: Upholding the declaration, the constitution of the acquiring company and its connection with the majority shareholders rendered this a special case where the normal rule as to the burden of proof did not apply. ”But if the minority shareholder shows, as he shows here, that the offeror and the ninety per cent of the transferor company’s shareholders are the same, then as it seems to me he has prima facie shown that the court ought to order otherwise, since if it should not so do the result would bethat the section has been used not for the purpose of any scheme or contract properly so called or contemplated by the section, but for the quite different purpose of enabling majority shareholders to expropriate or evict the minority’ Lord Justice Harman:- ‘The minority shareholders advisers waived that objection also, and he having applied to the court under the section had, like any other applicant, to prove his case, that is to say to set up a case which the respondents had to answer. He did that quite simply by showing that the transferee company was nothing but a little hut built round his two co-shareholders, and that the so-called ‘scheme’ was made by themselves as directors of that company with themselves as shareholders and the whole thing, therefore, is seen to be a hollow sham. It is then for the transferee company to show that nevertheless there is some good reason why the scheme should be allowed to go on. The transferee company, whether because the two members did not wish to go into the witness-box and be cross-examined or for some other reason, did not file any evidence at all; they merely purported to rely on a copy of a valuation said to have been made on their behalf by a firm of chartered accountants. That valuation was not sworn to, nobody has been able to cross-examine the authors of it and there was in my judgment no case in answer. The minority shareholder has nothing to knock down; he has only to shout and the walls of Jericho fall flat. I am surprised that it was thought that so elementary a device would receive the court’s approval.’

Judges:

Lord Evershed MR, Lord Justice Harman

Citations:

[1961] Ch 270

Statutes:

Companies Act 1948 209

Jurisdiction:

England and Wales

Citing:

Appeal from – 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 . .

Cited by:

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

Company

Updated: 06 June 2022; Ref: scu.221020

Carlton Communications Plc, Granada Media Plc v The Football League: ComC 1 Aug 2002

The applicants sought a declaration that they had not provided guarantees to support a contract between a joint venture company owned by them, OnDigital, and the respondent to screen football matches. The company had become insolvent.
Held: The applicants had indicated in the initial bid document that they would guarantee the bid, but that guarantee had not been incorporated into the later documents. OnDigital was not able to bind the claimants. The bid had been renegotiated and reformulated before being signed. A guarantee had to be in writing, and the initial statement had been superceded. Subject to contract negotiations remain in negotiation until a formal contract is concluded. A company is not the agent of its shareholders. A declaration that the claimants had not guaranteed the contract was granted.

Judges:

The Honourable Mr Justice Langley

Citations:

[2002] EWHC 1650 (Comm)

Links:

Bailii

Statutes:

Statute of Frauds 1677 4

Citing:

Cited – Tiverton Estates Ltd v Wearwell Ltd CA 1975
“Subject to Contract” not to be diluted
‘subject to contract’ proposals remain in negotiation until a formal contract is executed. Lord Denning MR said: ‘for over a hundred years, the courts have held that the effect of the words ‘subject to contract’ is that the matter remains in . .
Cited – Salomon v A Salomon and Company Ltd HL 16-Nov-1896
A Company and its Directors are not same paersons
Mr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. He held nearly all the shares, and had received debentures on the transfer into the company of his former business. The business failed, and . .

Cited by:

Cited – The Football League Ltd v Edge Ellison (A Firm) ChD 23-Jun-2006
The claimants operated football leagues, and asked the defendant solicitors to act in negotiating the sale of television rights to ONdigital. The broadcasts went ahead, but no guarantees were taken for the contract. The claimants alleged . .
Cited – Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd and Another ComC 21-Jan-2011
The defendants sought to set aside orders allowing the claimants to serve proceedings alleging repudiation of a charterparty in turn allowing a claim against the defendants under a guarantee. The defendant said the guarantee was unenforceable under . .
Lists of cited by and citing cases may be incomplete.

Contract, Media, Company

Updated: 06 June 2022; Ref: scu.174428

Davies v The United Kingdom: ECHR 16 Jul 2002

The applicant had been subject to applications for his disqualification from acting as a company director. The Secretary of State waited until the last day before issuing proceedings, and the proceedings were then delayed another three years pending the outcome of criminal proceedings against others. The government responded that the proceedings were complex, and the applicant himself had contributed to the delay by his own applications.
Held: The total delay was unjustified and inordinate, and the delay infringed the applicant’s right to a determination within a reasonable period of time. The domestic court had criticised the respondent for its delay. The proceedings had not been pursued with diligence. The court would not make an award of damages for financial losses, but that did not prevent an award for the stress of the delay, and an award was made in this case.
Hudoc Judgment (Merits and just satisfaction) Violation of Art. 6-1; Pecuniary damage – claim rejected; Non-pecuniary damage – financial award; Costs and expenses partial award – Convention proceedings

Judges:

M Pellonpaa, President and Judges Sir Nicolas Bratza, A. Pastor Ridruejo, E. Palm, M. Fischbach, J. Casadevall and S. Pavlovschi, Section Registrar M. O’Boyle

Citations:

Times 01-Aug-2002, 42007/98, [2002] ECHR 597, (2002) 35 EHRR 720, [2002] ECHR 602

Links:

Worldlii, Bailii

Statutes:

Company Directors Disqualification Act 1986 6, European Convention on Human Rights 6.1

Jurisdiction:

Human Rights

Citing:

Cited – In Re Carecraft Construction Co Ltd ChD 13-Oct-1993
A court must hear evidence before disqualifying directors. Though the Director and the Secretary of State might reach an agreement as to what should happen, they could not displace the court in deciding what order should be made, and in making that . .
Cited – Robins v The United Kingdom ECHR 23-Sep-1997
Over-long delay by court system in settling amount of costs constituted breach of human rights; order made in 1991, not settled till 1995 . .
Cited – Secretary of State for Trade and Industry v Davies and Others CA 7-Jun-1996
The lack of a good reason for delay was not terminal to a company director disqualification application. . .
Cited – Kingsley v The United Kingdom (No 2) ECHR 28-May-2002
The finding that a party had been denied a fair trial may of itself be sufficient compensation. The applicant had been excluded from management of licensed casinos. The appeal board had been found to have given the appearance of bias against him. . .
Cited – Abdulaziz etc v The United Kingdom ECHR 28-May-1985
Three women, all lawfully settled in the UK, had married third-country nationals but, at first, the Secretary of State had refused permission for their husbands to remain with them, or join them, in the UK.
Held: The refusals of permission had . .

Cited by:

Cited – Eastaway v The United Kingdom ECHR 20-Jul-2004
The applicant had been proceeded against after the collapse of companies in which he was involved with very substantial debts. The proceedings had begun in July 1990, and lasted nearly nine years.
Held: Where proceedings could be expected to . .
Cited – Greenfield, Regina (on the Application of) v Secretary of State for the Home Department HL 16-Feb-2005
The appellant had been charged with and disciplined for a prison offence. He was refused legal assistance at his hearing, and it was accepted that the proceedings involved the determination of a criminal charge within the meaning of article 6 of the . .
Lists of cited by and citing cases may be incomplete.

Company, Damages

Updated: 06 June 2022; Ref: scu.174387

Smith v Henniker-Major and Co: CA 22 Jul 2002

The claimant appealed the strike-out of his claim for professional negligence against the respondent solicitors. He claimed that the solicitors had acted in breach of their duty, and he then called a company meeting. Only he attended. He mistakenly believed that he had the power to assign to himself from the company the right of action. He later arranged for a deed to be issued which purported to rectify the mistake.
Held: Section 35A allowed somebody dealing with a company in good faith not to be affected by a failure to comply with the company’s constitution. The section was intended to forgive procedural irregularities, not to rectify what was otherwise a nullity. In this case however, the error sought to be forgiven was that of the chairman, and he was the party also seeking to rely on the section. He could not, by forgiving his own error, turn a nullity into a decision of the board. Robert Walker LJ considered the rule on ratification by a company: ‘Ratification is not effective where to permit it would unfairly prejudice a third party, and in particular-(1) where it is essential to the validity of an act that it should be done within a certain time, the act cannot be ratified after the expiration of that time, to the prejudice of any third party; (2) the ratification of a contract can only be relied on by the principal if effected within a time after the act ratified was done which is reasonable in all the circumstances.’ and ‘I am inclined to think that this debate (as to whether the exception is limited to ratification affecting property rights) may not be particularly profitable. Even though the operation of the Limitation Act 1980 is normally to bar the remedy rather than to extinguish the right, an accrued defence under the Act has often been spoken of in terms approximating to a property right of which a party ought not to be deprived. In my view the right approach would be to regard the deprivation of an accrued right as an important example of the general rationale identified in Bowstead and Reynolds’s article 19, that is, unfair prejudice.’

Judges:

Lord Justice Schiemann, Robert Walker LJ

Citations:

Times 29-Aug-2002, Gazette 26-Sep-2002, [2002] EWCA Civ 762, [2003] Ch 182

Links:

Bailii

Statutes:

Companies Act 1985 35A

Jurisdiction:

England and Wales

Citing:

Cited – Pontin v Wood CA 1962
The writ had been issued just before the expiration of the relevant limitation period in a defective form in that it was endorsed merely with the words ‘the plaintiffs’ claim is for damages for personal injuries’. The judge in chambers held that the . .
Appeal from – Smith v Henniker-Major and Co ChD 17-Oct-2001
. .

Cited by:

Cited – Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd, Targetfollow Group Ltd ChD 9-Nov-2004
The defendant entered into an agreement for lease, incurring substantial obligations. When it could not meet them it sought assistance from the claimant, who now claimed to have an interest in a joint venture. The draft documentation originally . .
Cited – Parker and Another v SJ Berwin and Co and Another QBD 17-Dec-2008
The claimants sought damages from their former solicitors. They set out to purchase a football club, expending substantial sums for the purpose, relying on the defendants’ promised provision of service in finding and arranging the funding. They said . .
Cited – Roberts v Gill and Co Solicitors and Others SC 19-May-2010
The claimant beneficiary in the estate sought damages against solicitors who had acted for the claimant’s brother, the administrator, saying they had allowed him to take control of the assets in the estate. The will provided that property was to be . .
Lists of cited by and citing cases may be incomplete.

Company, Agency

Updated: 06 June 2022; Ref: scu.174345

Jaffray and others v Society of Lloyd’s: CA 26 Jul 2002

There is no more scope for corporate dishonesty in deceit than in misfeasance, other than by the attribution to a corporate body of the dishonesty of an individual. It was alleged that there was unfairness through inequality of representation: ‘In our judgment, those principles are not directly applicable to the question whether a trial was fair, but they are of assistance. They are not directly applicable because the question is not whether there was a real possibility or real danger that the trial was unfair, but whether it was unfair. We can see no reason why this court (or any court of review) should not be able to judge whether or not the trial was in fact unfair, once it has considered all the relevant circumstances.
The principles are, however, of assistance because they stress that the question must be viewed through the eyes of the reasonable observer or litigant. The same principle seems to us to apply here. Thus the question is not whether a disappointed litigant thinks the trial was unfair, but whether a reasonable person in his or her position would think so, having regard to all the circumstances of the case. The circumstances are of importance because, before concluding that a trial is unfair, the court must consider all the relevant circumstances. As appears below, this is in our opinion important on the facts of the case.’

Judges:

Lord Justice Clarke

Citations:

[2002] EWCA Civ 1101

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Thomas-Everard and Others v Society of Lloyd’s ChD 18-Jul-2003
The claimant appealed refusal to set aside a statutory demand made by the respondent society. The proposed defence had been already been dismissed by the courts.
Held: Such a consideration was very relevant, but not necessarily determinative. . .
Cited – Chagos Islanders v The Attorney General, Her Majesty’s British Indian Ocean Territory Commissioner QBD 9-Oct-2003
The Chagos Islands had been a British dependent territory since 1814. The British government repatriated the islanders in the 1960s, and the Ilois now sought damages for their wrongful displacement, misfeasance, deceit, negligence and to establish a . .
Cited – Cairnstores Ltd Generics (UK) Ltd and Another v Aktiebolaget Hassle CA 22-Oct-2002
Two patents had been invaildated for obviousness. They related to coatings on medicinal pills. The patent holder said the judge’s interruptions indicated bias.
Held: The sumissions were unjustified. The interventions were by no means . .
Lists of cited by and citing cases may be incomplete.

Company, Torts – Other

Updated: 06 June 2022; Ref: scu.174354

Currencies Direct Limited v Ellis: CA 31 May 2002

The claimant company appealed against an order declining to order repayment of sums they claimed to be due from the defendant, a former director of the company. They said the payments were repayable loans, and he said that they had been been remuneration and irrecoverable. The defendant appealed against the order that some sums were repayable loans.
Held: The findings by the judge were based upon evidence before him, and his assessment of the facts was not to be disturbed. Appeal and cross appeal dismissed.
Remuneration is essentially consideration for work done or to be done. Not dependent on fixing definite level or rate to be paid. Consideration may take different forms, not necessarily conventional direct payment of regular wage, salary cheque or credit

Judges:

Simon Brown, Mummery LJJ, Hart J

Citations:

[2002] EWCA Civ 779

Links:

Bailii

Statutes:

Companies Act 1985 330(2)(a) 340 341 342

Jurisdiction:

England and Wales

Citing:

Appeal from – Currencies Direct Ltd v Ellis QBD 19-Oct-2001
The fact that a loan to a director was unlawful did not prevent a company seeking to recover or enforce the loan. A transaction made in contravention of section 330 was voidable at the instance of the company. The implication of section 341 was that . .
Cited – Regina v The Postmaster General 1876
Blackburn J said: ‘If a man gives his services, whatever consideration he gets for giving his services seems to me to be a remuneration for them. Consequently, I think if a person was in receipt of a payment or in the receipt of a percentage, or any . .

Cited by:

See Also – Ellis v Currencies Direct Ltd EAT 12-Nov-2002
EAT Unfair Dismissal – Jurisdiction. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 06 June 2022; Ref: scu.172271

Ross Harper and Murphy and others v Scott Banks: OHCS 11 May 2000

Judges:

Lord Hamilton

Citations:

[2000] ScotCS 120

Links:

Bailii

Jurisdiction:

Scotland

Cited by:

Appeal from – Ross Harper and Murphy and others v Scott Banks IHCS 24-May-2000
Justinian’s rule that one partner accepted the negligence of another is not part of Scottish law, and a partner did owe a duty of care in his dealings for the partnership, and could be liable in negligence. Nevertheless, acts which may be negligent . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 06 June 2022; Ref: scu.170387

Micro Leisure Limited v County Properties and Developments Limited and Another: OHCS 15 Oct 1999

When the court looked at the acquisition of property from a company by a director or a person connected with that director, and had to assess the objective value of the property acquired, the court had to look at the value as judged to the person acquiring the property rather than the market value.

Judges:

Lord Hamilton

Citations:

Times 12-Jan-2000, [1999] ScotCS 240

Links:

Bailii

Statutes:

Companies Act 1985 320(2)

Jurisdiction:

Scotland

Company

Updated: 05 June 2022; Ref: scu.169511

London and Regional Investments Ltd v TBI Plc and Others: CA 22 Mar 2002

TBI was a property investor and developer with several subsidiaries. It agreed to sell some to London and Regional. The agreement provided for the vendor and the purchaser to use reasonable endeavours to agree the terms of a joint venture agreement regarding land at Belfast and Cardiff airports, having regard to the principles set out in an agreed note. The agreed note was headed ‘subject to contract’. One of the issues was whether London and Regional were entitled to rely on the Pallant v. Morgan equity as a result of the assurance or understanding that a joint venture agreement would be entered into.
Held: There was no realistic prospect of London and Regional establishing that claim; and upheld a summary judgment in TBI’s favour. Mummery LJ: ‘The ‘subject to contract’ state of the joint venture negotiations at the date of the Sale Agreement indicates that there is nothing unconscionable in TBI’s subsequent refusal to proceed with the joint venture after the Sale Agreement was completed. The validity of this conclusion can be tested by asking this question: when did the trust and the estoppel take effect? It is accepted that no constructive trust or estoppel could have arisen after 13 May 1999 when the parties expressly agreed in the Sale Agreement that the joint venture was ‘subject to contract’. In general, it is not unconscionable for a party to negotiations, which are expressly stated to be ‘subject to contract,’ to exercise a reserved right to withdraw from the negotiations before a final agreement has been concluded. If that was the effect of the agreement between the parties on 13 May 1999 I do not see how the conduct of TBI before that date can now be relied on to establish unconscionable conduct giving rise to a constructive trust or an estoppel. For the court to hold that a constructive trust existed in those circumstances would be contrary to what the parties had expressly agreed was to be subject to the making of a future agreement.’

Judges:

Lord Justice Simon Brown, Mummery LJ

Citations:

[2002] EWCA Civ 355

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Limited – Banner Homes Group Plc v Luff Developments and Another CA 10-Feb-2000
Competing building companies agreed not to bid against each other for the purchase of land. One proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture.
Held: Although there was no formal . .
Cited – Pallant v Morgan ChD 1952
The agents of two neighbouring landowners orally agreed in the auction room that the plaintiff’s agent would refrain from bidding at auction and that the defendant, if his agent’s bid was successful, would divide the land according to an agreed . .
See Also – London and Regional Investments Ltd v TBI Plc and Another CA 22-Jun-2001
. .
Cited – Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd PC 1987
An agreement in principle was marked ‘subject to contract’. The Government would acquire some flats owned the plaintiff Group of companies in return for the Government granting, inter alia, a lease to the Group of some Crown lands. The Government . .

Cited by:

Cited – Thames Cruises Limited v George Wheeler Launches Limited, Kingwood Launches Limited ChD 16-Dec-2003
The parties had previously worked to gether to provide ferry services on the Thames. A new tender to operate the services was not submitted. It was alleged that the Defendants had inequitably seized for themselves a business opportunity which the . .
See Also – London and Regional Investments Ltd v TBI Plc and Another CA 22-Jun-2001
. .
Cited – Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd, Targetfollow Group Ltd ChD 9-Nov-2004
The defendant entered into an agreement for lease, incurring substantial obligations. When it could not meet them it sought assistance from the claimant, who now claimed to have an interest in a joint venture. The draft documentation originally . .
Cited – Cobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
Cited – Yeoman’s Row Management Ltd and Another v Cobbe HL 30-Jul-2008
The parties agreed in principle for the sale of land with potential development value. Considerable sums were spent, and permission achieved, but the owner then sought to renegotiate the deal.
Held: The appeal succeeded in part. The finding . .
Cited – Hutchison and others v B and DF Ltd ChD 3-Oct-2008
The claimants sought an order declaring that the defendant had a tenancy and requiring it to execute an appropriate lease. The landlords said that the tenant had a continuation lease under the 1954 renewal procedure, and the tenants said they had . .
Lists of cited by and citing cases may be incomplete.

Company, Trusts

Updated: 05 June 2022; Ref: scu.170009

CVC/Opportunity Equity Partners Limited and Opportunity Invest II Limited v Luis Roberto Demarco Almeida: PC 21 Mar 2002

(Cayman Islands) The respondent was a minority shareholder. An offer was made to buy out his interest. He petitioned for the winding up of the company on the just and equitable ground. The claimants obtained an injunction to prevent him doing so, saying that it was used for an improper purpose. The claimants applied for the injunction to be re-instated. The defendant had been a general manager of the joint venture investment company dismissed for poor performance.
Held: The offer to purchase the shares had been made only at par. Unfairness lay, not in the exclusion of the member of the company, but in an exclusion not accompanied by an offer to purchase his interest. Where the member was excluded against his will, the shares should normally be valued without discount. Here the offer was well below that value, and it was not unreasonable to refuse it, and nor accordingly was the threatened petition an abuse of process, though ‘The special nature of winding up proceedings and the loss which they may cause the company and its shareholders, however, makes it incumbent on the court to ensure that they are not brought for an improper purpose.’

Judges:

Lord Bingham of Cornhill Lord Hutton Lord Hobhouse of Woodborough Lord Millett Lord Rodger of Earlsferry

Citations:

Appeal No 4 of 2001, [2002] UKPC 16, (Appeal No 4 of 2001), [2002] 2 BCLC 108, [2002] BCC 684

Links:

PC, PC, PC, Bailii, PC

Jurisdiction:

Commonwealth

Citing:

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 – In re Bird Precision Bellows Ltd CA 1986
The company which was formed to combine one party’s expertise in the manufacturing of precision bellows with the general experience of two others in financial, commercial and industrial matters. For several years the company’s affairs had worked . .
Cited – Ebrahimi v Westbourne Galleries Ltd and Others (on Appeal from In Re Westbourne Galleries Ltd) HL 3-May-1972
Unfair Prejudice to Minority Shareholder
A company had operated effectively as a partnership between two and then three directors. No dividends had been paid, but the directors had received salaries. One director was removed and sought an order for the other to purchase his shares, or . .
Cited – Re Abbey Leisure CA 1990
A minority shareholder had brought a petition to wind up the company, saying the project for which it had been created was complete. An offer was made to purchase his shares. He rejected the offer to purchase his shareholding at an accountant’s . .
Cited – In re Bird Precision Bellows Ltd ChD 1984
The court considered the method of valuation of a minority shareholding in a forced purchase by the other shareholders. Nourse J said: ‘I would expect that in a majority of cases where purchase orders are made under section 75 in relation to . .
Cited – Syers v Syers HL 1876
The court has power to ascertain the value of a former partner’s interest without a sale if it can be done by valuation, and will do so where that interest is relatively small. . .
Cited – Re a company (No 003843 of 1986) 1987
The petitioners sought re-instatement as directors or the winding up of the company. The respondents had offered to buy their shares at more than their break up or liquidation value, at a price equal to a rateable proportion of the company’s assets . .
Cited – Charles Forte Investments Ltd v Amanda CA 1964
A minority shareholder complained of the board’s refused to register transfers of his shares to a third party. He threatened to present a winding up petition unless the board registered the transfers.
Held: He would be restrained from . .

Cited by:

Cited – Irvine and others v Irvine and Another ChD 23-Mar-2006
The court had made an order for the purchase of a minority shareholding after finding prejudicial behaviour by the majority. It now considered valuation of the shares in a 49.96% shareholding. The question was whether the valuation should be . .
Cited – Harborne Road Nominees Ltd v Karvaski and Another ChD 19-Aug-2011
The claimant asked the court to set aside as an abuse the petition issued by the defendants, saying that it was only an attempt to obtain control of the company.
Held: The application failed. To succeed the claimant must show that his offer . .
Cited – Crabtree v Ng CA 21-Mar-2012
The parties disputed the valuation of shares they held. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 05 June 2022; Ref: scu.168107

Buchler and Another v Talbot and others: CA 22 Feb 2002

The company’s assets were subject to a floating charge. That had crystallised. The liquidators, after a voluntary winding up, sought to make the assets remaining after repayment of the sums secured, available to pay the costs of the winding up. The trustees of the debenture sought to appeal a finding that the assets were so available.
Held: Having come within section 40, it would later fall within section 175(2)(b) upon insolvency. If they had not been paid by the receiver for his purposes they were available to pay the liquidators costs.

Citations:

Gazette 25-Apr-2002, [2002] EWCA Civ 228

Links:

Bailii

Statutes:

Insolvency Act 1986 40 175(2(b) 251

Jurisdiction:

England and Wales

Cited by:

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

Insolvency, Company

Updated: 05 June 2022; Ref: scu.167954

Bonham v Crow and others: CA 13 Dec 2001

The petitioner complained of unfair prejudice in the way the company had been operated, and sought an order that his shares be bought out. However the judge found that the net value of the company was negative and the shares worthless. The judge had held that an offer to buy the shares for andpound;5,000 had been reasonable, but that since this was unacceptable to the petitioner, no order was to be made. The petitioner appealed on the basis that the judge had not allowed for irregularities in the accounting.
Held: The relief sought was discretionary, and the judge’s decision was not to be interfered with easily. The judge had found prejudicial behaviour by the respondents. The judge had failed to make allowance for the shareholders’ agreement, which if followed would have led to payments to the petitioner. The accounting irregularities, when allowed for put value back into the company, and the appeal was allowed.

Judges:

Lord Justice Clarke And Lady Justice Arden

Citations:

[2001] EWCA Civ 1931

Links:

Bailii

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Citing:

Cited – In re Elgindata Ltd ChD 1991
The plaintiff obtained a patent which was then to be utilised through the company, of which the plaintiff had one third shares. He later complained that the majority shareholder had acted prejudicially.
Held: Mismanagement could amount to . .
Cited – Fulham Football Club Ltd v Cabra Estates plc CA 1994
Fulham, as lessees of Craven Cottage, agreed with CABRA, a developer, who had applied for planning permission to redevelop the ground, shortly before a public inquiry which had been set up to consider the planning application; and also a proposal by . .
Cited – Russell v Northern Bank Development Corporation Limited and Others HL 15-Jul-1992
Four directors of the company agreed with each other not to create further share capital. A director seeking to enforce the agreement, appealed against a judgment that the agreement was invalid in seeking to fetter the company’s stautory powers.
Cited – In re Cumana Ltd CA 1986
The court considered the date at which shares are to be valued in a possible order for one set of shareholders to buy the shares of another.
Held: The choice was a matter of the judge’s discretion. Where a minority shareholder has a petition . .
Cited – Profinance Trust SA v Gladstone CA 2-Jul-2001
When a court ordered the purchase of the shares of a minority shareholder by the majority holder, the shares should normally be valued as at the date of that order. This might cause unfairness in some cases, for example where the company had been . .
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 – Re London School of Electronics 1986
The court considered its powers under the section: ‘The combined effect of sub-ss (1) and (3) is to empower the court to make such order as it thinks fit for giving relief, if it is first satisfied that the affairs of the company are being or have . .
Cited – Scottish Co-operative Wholesale Society Ltd v Meyer HL 1959
Valuation of Shares on Order for Purchase
The Co-operative Society had formed a 51 per cent-owned subsidiary to manufacture rayon at a time of strict post-war controls. The other shares were owned by two outside directors with skill and experience in the trade. When these directors declined . .
Cited – Antoniades v Kin ; Re Full Cup International Trading Ltd CA 5-Mar-1997
The form of relief under section 461 is discretionary and on an appeal as to the judge’s choice of remedy or relief it has to be shown that his order was outside the generous ambit within which disagreement is possible or is otherwise reviewable on . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 05 June 2022; Ref: scu.167855

Secretary of State for Trade and Industry v Creegan and others: CA 27 Nov 2001

‘It is well established on the authorities that causing a company to trade, first, while it is insolvent and, secondly, without a reasonable prospect of meeting creditors’ claims is likely to constitute incompetence of sufficient seriousness to ground a disqualification order. But it is important to emphasise that it will usually be necessary for both elements of that test to be satisfied. In general, it is not enough for the company to have been insolvent and for the director to have known it. It must also be shown that he knew or ought to have known that there was no reasonable prospect of meeting creditors’ claims’

Citations:

[2001] EWCA Civ 1742, [2002] 1 BCLC 99

Links:

Bailii

Statutes:

Company Directors Disqualification Act 1986 6

Jurisdiction:

England and Wales

Cited by:

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

Company

Updated: 05 June 2022; Ref: scu.167833

Braymist Limited and Others v Wise Finance Company Limited: CA 20 Feb 2002

The claimant company set out to sell land whilst it was still only in the process of incorporation. Its solicitors had signed as agents, and now sought an order for the purchaser to complete the contract. The respondent had not known of the non-incorporation of the company. The claimant later rescinded the contract, and forfeited the deposit. At first instance Etherton J had held that the solicitors had been capable of rescinding and had rescinded the agreement, that the contractual deposit was forfeit to the solicitors and that Wise was liable to pay the solicitors damages for breach of contract.
Held: The appeal failed. The section in the 1985 Act implemented a clause in the 1972 Act and the 1968 directive. Was the agent both liable under the contract and able to enforce it, and was the agreement unenforceable for failure to comply with the 1989 requirement for an appropriate memorandum? The European directive was to be interpreted directly. It was a compromise of different laws through member states, but was silent as to the ability of an agent to enforce such a contract. Section 36C should not be read down to limit its meaning. In this case, the solicitor agent could enforce the contract. As a party to the contract, he could also sign, and the 1989 Act should not be read too strictly.
Latham LJ said:
‘It is common ground that section 36C of the Companies Act 1985, and its predecessor, was enacted in order to give effect to article 7 of the First Council Directive (68/151/EEC) already referred to by Arden L.J. in her judgment, and in particular to reverse the decision of this court in Newborne v. Sensolid (Great Britain) Ltd. [1954] 1 QB 45. It also put to rest any doubts that there might have been as to the liability of a person who purports to act as an agent in such a situation . .’
Judge LJ explained to effect of Section 36C:
‘ . . The purported contract, otherwise a nullity, ‘has effect’, not as one made with the unformed company but as one made with the purported agent, who is ‘personally liable’ to [the other party] on the contract.’
Judge LJ, ultimately favoured ‘the broad view’ and said:
‘My difficulty is created by the concluding words of the subsection, ‘and he is personally liable on the contract accordingly’. If the contract ‘has effect’ as one made with the purported agent of the company, B [the ‘agent’] would become personally liable on the contract without the concluding words of the subsection. The contract ‘has effect’. The language of section 36C(1) reflects the broad thrust of the First Council Directive (68/151/EEC), first implemented domestically in its predecessor, section 9(2) of the European Communities Act 1972 . The recital twice refers to ‘protecting’ third parties . .
If the broad view is correct, the statute has gone much further than the creation of new protection for A [the other contracting party]. Plainly, as a matter of statutory construction, section 36C(1) may have extended beyond simple compliance with the Directive. Nevertheless the concluding words add something: if surplusage, they would not be there. Their presence provides a clear indication that the highlight of section 36C(1) is protection for A.’
Judge LJ continued:
‘In principle, the identity of the other party to a contract often matters, sometimes very much indeed. A might happily contract with C, but not with either B, or even D, even if identical terms were available. He may have a complete antipathy to being beholden to or under any legal obligation personally to B, or indeed anyone other than C. There are, of course, well understood exceptions to the principle that an individual is free to decide whether and with whom to enter or not to enter, a contract (for example, the legislation in relation to discrimination on the grounds of sex or race). But I may illustrate the difficulties by considering a contract of employment, underlining that so far as unformed companies are concerned, there are no limits to the contracts to which section 36C(1) applies: it applies to them all. A may welcome the opportunity of employment, as, say, an office manager for a particular company, with which he is contracting. If the company is unformed, is he bound to accept similar employment on identical contractual terms, with B? Or become liable to B for breach of contract if he refuses or fails to do so? Surely not. The answer however is not that the contract is automatically deprived of the ‘effect’ which section 36C(1) has created, but rather, that just as section 36C(1) is not apt to exclude considerations such as illegality, or misrepresentation, or other incidents of a contract, it is equally inappropriate to exclude relief on the basis of the identity of the contracting party, if relief would be available on ordinary contractual principles.’

Judges:

Lord Justice Judge, Lord Justice Latham, Lady Justice Arden

Citations:

Gazette 28-Mar-2002, Times 05-Apr-2002, [2002] EWCA Civ 127, [2002] Ch 273, [2002] 1 BCLC 415, [2002] 2 All ER 333, [2002] 3 WLR 322

Links:

Bailii

Statutes:

Companies Act 1985 36C(1), European Communities Act 1972 9(2), First EC Company Law Directive (68/151/CEE OJ No. 1968 L6) Art 7, Law of Property (Miscellaneous Provisions) Act 1989 2(1) 3

Jurisdiction:

England and Wales

Citing:

Cited – Phonogram Ltd v Lane CA 1982
A collateral contract was entered into with a company which had not then been incorporated under which an advance by Phonogram to support an intended new pop group was repayable by the company if a recording contract was not entered into within one . .

Cited by:

Cited – Royal Mail Estates Limited v Maple Teesdale Borzou Chaharsough Shirazi ChD 2-Jul-2015
A contract had been made but one of the parties was not yet incorporated. The court was asked whether it was deemed to have been made with the signatory.
Held: For section 36C(1), a ‘contrary agreement’ would be established if the parties, . .
Lists of cited by and citing cases may be incomplete.

Company, Land, Legal Professions, European, Contract

Updated: 05 June 2022; Ref: scu.167665

Dennis Pritchard Evans v Tiger Investments Limited, David John Moore: CA 20 Feb 2002

The first defendant appealed a judgement that it was responsible to the claimant for a loan taken out by the second defendant, one of its shareholders. He had said it was for the company, and he had been found not personally responsible. Land had been purchased in the second defendant’s name, he said, only for convenience in a speedy transaction, and the charge had been executed by him for the company.
Held: The judge had evidence sufficient to establish that the land was being purchased for the first defendant. The appellants sought to introduce new evidence at appeal. The Ladd principles on admission of evidence at appeal, are that the evidence was not with reasonable diligence available for the trial; that the evidence would have an important influence, and that it was credible. In this case the evidence could have been obtained. Concentrating on the justice as between claimant and defendant, there was no purpose in relaxing that principle.

Judges:

The President, Lord Justice Potter, And, Lord Justice Kay

Citations:

[2002] EWCA Civ 161

Links:

Bailii

Statutes:

Civil Procedure Rules 52.11(2)

Jurisdiction:

England and Wales

Citing:

Applied – Ladd v Marshall CA 29-Nov-1954
Conditions for new evidence on appeal
At the trial, the wife of the appellant’s opponent said she had forgotten certain events. After the trial she began divorce proceedings, and informed the appellant that she now remembered. He sought either to appeal admitting fresh evidence, or for . .
Lists of cited by and citing cases may be incomplete.

Company, Land, Evidence, Civil Procedure Rules

Updated: 05 June 2022; Ref: scu.167633

Farrar v Farrars Ltd: CA 1888

The mortgagor of a quarry defaulted, and the mortgagees took possession. They were unable to sell the quarry, but formed a company which bought the quarry at a proper value. The mortgagor sought to set aside the sale.
Held: A mortgagee in possession exercises a personal right primarily in his own interests as a mortgagee, The self-dealing rule applies in that a mortgagee cannot exercise the power to sell to himself or to a nominee or to a company of which he is the sole director and shareholder, but he can sell to a company in which he has a significant interest but the onus lies on him to justify the terms of sale. The mortgagees had shown that the sale was made in good faith, and at a proper price; with the consequence that the sale stood.

Citations:

(1888) 40 Ch D 395

Jurisdiction:

England and Wales

Cited by:

Cited – Newport Farm Ltd and 22 others v Damesh Holdings Ltd and others PC 7-Jul-2003
(New Zealand) The clamaints alleged that mortgagees had failed to take proper steps to obtain the best price on selling their properties as mortagees. The common law duty had been encapsulated in the 1952 Act. Here, however the landowners had . .
Cited – Newgate Stud Company, Newgate Stud Farm Llc v Penfold, Penfold Bloodstock Limited ChD 21-Dec-2004
The claimants sought damages from the defendant. He had been employed to manage their horse-racing activities, and it was alleged that he had made secret profits. The defendant denied any dishonesty, saying all matters were known to the deceased . .
Cited – Meretz Investments Nv and Another v ACP Ltd and others ChD 30-Jan-2006
The applicant challenged the exercise of a power of sale under a mortgage, saying that the mortgagee’s purposes included purposes not those under the mortgage. The parties had been involved in an attempted development of a penthouse.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Land, Company

Updated: 05 June 2022; Ref: scu.184562

Professional Contractors’ Group and Others v Commissioners of Inland Revenue: CA 21 Dec 2001

Legislation had been enacted to tax under Schedule E, people employed through one man service companies and similar. Representatives of such taxpayers sought review of the legislation as incompatible with European law being a hindrance to the freedom of movement of workers and also state aid. The law set to catch those who would be employees rather than self-employed but for the use of the limited company.
Held: To constitute state aid, their must a an advantage created to an identifiable class of undertakings. A provision which appears discriminatory may not be so if it puts two groups on a more equal basis. There was no state aid. IR35 does not provide a particularly burdensome restriction on those wishing to work within the UK, save where the true character of the relationship was one of employment. Genuine self-employed activities will not be affected and a business of providing employee-like services will be taxed as if there was a real employment situation.

Judges:

Lord Justice Auld, Lord Justice Robert Walker, And, Lord Justice Dyson

Citations:

Times 14-Jan-2002, [2001] EWCA Civ 1945, [2002] STC 165

Links:

Bailii

Statutes:

Finance Act 2000 60, Welfare Reform and Pensions Act 1999 75 76, Social Security Contributions (Intermediaries) Regulations 2000 (2000 No 272)

Jurisdiction:

England and Wales

Citing:

Cited – Market Investigations v Minister of Social Security 1969
One way of deciding whether a person is self employed is to ask whether he can be said to be running a business of his own. Different tests may have to be combined to produce an overall answer.
Cooke J said: ‘The fundamental test to be applied . .
Cited – Hall (Inspector of Taxes) v Lorimer CA 5-Nov-1993
A freelance vision mixer remained self-employed despite having had a series of short term contracts. . .
Appeal from – Regina and Commissioners of Inland Revenue ex parte Professional Contractors Group Ltd; Ruud Van Zundert and Square Mile Projects Ltd Admn 2-Apr-2001
Legislation was introduced changing the taxation of one man companies through which many professional contractors worked. The asserted that this infringed their human rights by depriving them of property rights in the companies, and was an . .

Cited by:

Cited – Synaptek Ltd v Young (Inspector of Taxes) ChD 28-Mar-2003
The taxpayer was a computer consultant working through the medium of a limited liability company. The respondent sought to make him liable for social security contributions as an employee of the business which used his services.
Held: The . .
Appealed to – Regina and Commissioners of Inland Revenue ex parte Professional Contractors Group Ltd; Ruud Van Zundert and Square Mile Projects Ltd Admn 2-Apr-2001
Legislation was introduced changing the taxation of one man companies through which many professional contractors worked. The asserted that this infringed their human rights by depriving them of property rights in the companies, and was an . .
Cited – Usetech Ltd v HM Inspector of Taxes ChD 8-Oct-2004
The taxpayer operated through a one man limited company employed by a recruitment agency to provide IT services to a customer. He appealed a finding that he was liable to pay tax as an employee.
Held: The appeal was dismissed. The legislative . .
Cited – Emerging Markets Partnership (Europe) Ltd v Bachnak CA 19-Dec-2003
The claimant asserted unfair dismissal. The company denied that he was an employee. The company now appealed against the decision of the EAT to grant the claimant’s appeal. The claimant had been an employee, but the arrangement had been varied so . .
Cited – Bachnak v Emerging Markets Partnership (Europe) Ltd EAT 27-Jan-2006
EAT The claimant had worked as an adviser for the respondent identifying investment opportunities. He said he had been unfairly dismissed after disclosing that the company had overpaid for an investment. He now . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Employment, Company

Updated: 05 June 2022; Ref: scu.167210

Smith (Administrator of Cosslett (Contractors) Limited) v Bridgend County Borough Council; In re Cosslett (Contractors) Ltd: HL 8 Nov 2001

The standard building contract allowed a contractor to take plant and equipment from a site and sell it in payment of sums due under the contract, upon the other contractor becoming insolvent. It was said that this power amounted to a charge over the company’s assets, and should have registered at Companies House. Upon entering receivership, the contractor vacated the site, but the respondent found another contractor to continue the work using the same substantial equipment. The contractor’s receiver alleged the contract was void for non-registration.
Held: The clause operated as a floating charge, and was void as against the liquidator or administrator. It should have been registered.

Judges:

Lord Hoffmann, Lords Bingham, Browne-Wilkinson and Rodger; Lord Scott (dissenting)

Citations:

[2001] UKHL 58, [2002] 1 AC 336, 80 Con LR 172, [2001] 3 WLR 1347, [2002] 1 All ER 292, [2002] 1 BCLC 77, [2002] TCLR 7, [2001] BCC 740, [2002] BLR 160, [2001] NPC 161

Links:

House of Lords, Bailii

Statutes:

Companies Act 1985 395

Jurisdiction:

England and Wales

Citing:

Cited – Independent Automatic Sales Ltd v Knowles and Foster ChD 1962
The company in liquidation had sold machines on hire-purchase. It sued the finance company to recover hire-purchase agreements and other securities which it had charged to secure the repayment of advances. When the finance company relied upon the . .
Appeal from – Smith (Administrator of Cosslett (Contractors) Ltd) v Bridgend County Borough Council CA 19-Jan-2000
. .

Cited by:

Cited – Marcq v Christie, Manson and Woods Ltd CA 23-May-2003
The claimant’s stolen painting was put up for sale by the defendant. On being withdrawn, they returned it to the person who had brought it in. The claimant sought damages.
Held: There was no reported case in which a court has had to consider . .
Cited – Burton (Collector of Taxes) v Mellham Ltd HL 15-Feb-2006
The claimant sought interest on an overpayment of Advance Corporation Tax. The tax itself had been paid late, and the Collector claimed a set off.
Held: The claim to DTR could not be described as an attempt at self-help. It had a statutory . .
Cited – Online Catering Ltd v Acton and Another CA 10-Feb-2010
The claimant agreed for the defendant to repair its fleet of vehicles. The defendant, having fees outstanding, entered the claimants’ premises and removed vehicles saying falsely that they were to be repaired, and then refused to return them. The . .
Lists of cited by and citing cases may be incomplete.

Company, Construction, Torts – Other

Updated: 04 June 2022; Ref: scu.166805

Regina v Allen: HL 11 Oct 2001

The defendant appealed against a finding that he had concealed an emolument, namely accommodation. He said that, as a shadow director of the company within the extended meaning of that phrase under the Act, the deeming provisions under Income Tax law did not apply. The defendant argued that a shadow director could not be an office holder, since he was neither appointed, and nor could he resign. Even if he was an office holder, the employment was not one under which income was assessable under Schedule E. To hold otherwise would make no distinction between benefits associated with the ownership of a company, and those attributable to employment within it, and ignore territorial limitations.
Held: Both arguments failed. It was clearly the intention of Parliament to collect tax in such situations, and the territorial limitations were explicitly recognised. The defendant argued that the notice requiring him to provide information which might lead to his prosecution breached the right of silence. He had had read to him the Hansard statement which was intended to encourage co-operation. No promise had been made, and it was not involuntary, and in an any event, the information provided was false.

Judges:

Lord Bingham of Cornhill, Lord Nicholls of Birkenhead, Lord Steyn, Lord Hutton, Lord Scott of Foscote

Citations:

[2001] UKHL 45, [2002] 1 AC 509, [2002] HRLR 4, [2001] 4 All ER 768, [2001] STC 1537, 4 ITL Rep 140, [2002] 1 Cr App Rep 18, [2001] BTC 421, [2001] STI 134, [2001] UKHL TC – 74 – 263

Links:

House of Lords, Bailii, Bailii

Statutes:

Income and Corporation Taxes Act 1988 145, 154, 167(1), 167(2), 739(2), Taxes Management Act 1970 8(1) 20(1)

Jurisdiction:

England and Wales

Citing:

Cited – Funke v France ECHR 25-Feb-1993
M. Funke successfully challenged his conviction for failing to provide documents which the customs authorities had demanded of him, on the grounds that his rights under Article 6 had been infringed: ‘The Court notes that the customs secured Mr. . .
Not followed – Regina v Barker CCA 1941
In the course of investigating the defendant for tax faud, he was interviewed by the Inland Revenue. Relying upon a standard statement by the revenue, the appellant produced two ledgers which had been fraudulently prepared in order to induce the . .

Cited by:

Cited – Regina v Sewa Singh Gill and Paramjit Singh Gill CACD 31-Jul-2003
The appellants sought to challenge their convictions for cheating the Inland Revenue. They were accused of having hidden assets and income from the revenue. The appellants objected to the use at trial of material obtained in a ‘Hansard’ interview. . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, Income Tax, Company, Taxes Management, Human Rights

Updated: 04 June 2022; Ref: scu.166568

Re Denis Hilton Ltd: ChD 2002

A director was prosecuted for the criminal offence of fraudulent trading, and in light of that the Disqualification Unit at the Insolvency Service decided not to pursue its own disqualification application under s6 but to ask the prosecution to seek an order under s2 if a conviction was obtained. That request was made to the police officer in charge of the investigation. However, when the director came to be sentenced the prosecutor failed to ask for an order under s2 and the Crown Court judge did not consider the matter himself. The Secretary of State was by then out of time to bring s6 proceedings but did so under s4 which requires proof of an offence of fraudulent trading, whether or not the director has been convicted thereof.
Held: The decision not to proceed under s6 had not been made because it was considered that disqualification was not appropriate but rather that it was a matter that could be left to the criminal court, and subject to an implied reservation that it might be reviewed after the criminal trial. There had been no abandonment of disqualification proceedings that it would be unfair to go back on, and nothing that could amount to an estoppel. He accepted that in contrast to Rayna, the facts on which the s4 application was based were exactly those that were relied on in the criminal prosecution. That would not of course necessarily be the case in a s4 application; even if there had been a prior prosecution the s4 application might be based on different and/or additional facts, to be proved to the civil standard in the civil court.
As to the application of the doctrine of autrevois convict, Ferris J said: ‘However, this is not precisely the situation which he referred to when he said that the doctrine of autrefois convict might apply if one disqualification under s 2 was sought to be followed by another s 2 disqualification based on the same facts. There has been no s 2 disqualification in this case, and for reasons which I have indicated I do not think it right to infer that there was a positive decision by the criminal court not to impose a disqualification although it is, of course, a fact that the criminal court did not do so.’

Judges:

Ferris J

Citations:

[2002] 1 BCLC 302

Statutes:

Company Director Disqualification Act 1986 2 4 6

Jurisdiction:

England and Wales

Citing:

Cited – Re Barings and Others (No 3) ChD 1999
The disqualified director sought leave under section 17 to act as a director in circumstances which did not involve him assuming any executive responsibilities, other than of a trivial nature, and left him free to contract as a consultant.

Cited by:

Cited – The Secretary of State for Business, Innovation and Skills v Weston and Another ChD 5-Sep-2014
The Secretary of State sought company director disqualification orders against the defendants saying they had been convicted of making false instruments. The Insolvency service had decided against such proceedings, and the Crown Court judge, when . .
Cited – Secretary of State v Nimley ChD 5-Feb-2002
Directors had been tried and convicted of offences which could have founded a s2 disqualification order. After they had been sentenced and left the dock, prosecuting counsel said to the judge: ‘Your Honour has made no reference to disqualification . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 04 June 2022; Ref: scu.536465

Agrotexim and Others v Greece: ECHR 24 Oct 1995

Hudoc Not necessary to examine preliminary objection (ratione temporis); Preliminary objection allowed (victim); Lack of jurisdiction (complaint inadmissible, new complaint)
The applicant companies held shares in a company owning development land. The local Council took steps to expropriate the land. The shareholders complained that the company’s rights had been violated and that, in turn, that had adversely affected their rights because of the resulting fall in the value of their shares. The complaint was based on the proposition that the alleged violation of the Brewery’s rights to peaceful enjoyment of its possessions had affected their own financial interests because of the resulting fall in the value of their shares.
Held: A lifting of the corporate veil so as to disregard the fact that the person directly affected – the Brewery – was a separate legal personality and was (if anyone was) the victim, would be justified only in exceptional circumstances such as where it itself could not have raised the complaint.

Citations:

14807/89, (1996) EHRR 250, [1995] ECHR 42

Links:

Worldlii, Bailii

Statutes:

European Convention on Human Rights

Jurisdiction:

Human Rights

Cited by:

Cited – Weir and others v Secretary of State for Transport and Another ChD 14-Oct-2005
The claimants were shareholders in Railtrack. They complained that the respondent had abused his position to place the company into receivership so as to avoid paying them compensation on a repurchase of the shares. Mr Byers was accused of ‘targeted . .
Adopted – Humberclyde Finance Group Ltd v Hicks 14-Nov-2001
. .
Cited – AXA General Insurance Ltd and Others v Lord Advocate and Others SC 12-Oct-2011
Standing to Claim under A1P1 ECHR
The appellants had written employers’ liability insurance policies. They appealed against rejection of their challenge to the 2009 Act which provided that asymptomatic pleural plaques, pleural thickening and asbestosis should constitute actionable . .
Lists of cited by and citing cases may be incomplete.

Human Rights, Company

Updated: 04 June 2022; Ref: scu.165381

Unicomp Inc v Eurodis Electron Plc: ChD 7 May 2004

The tenant (CEM) fell into financial difficulties. In breach of covenant the premises were occupied by a related company (Unibol) which started paying the rent. The landlord (Fortwilliam) accepted the rent for nearly two years after having been put on notice of Unibol’s occupation and payment of the rent. During this period there were negotiations over an assignment of the lease which failed.
Held: The conduct of the landlord in failing to take action to enforce the covenants in the lease when it became clear to it that Unibol had taken possession of the premises and was paying the rent amounted to forbearance: ‘What occurred here, as a result of Fortwilliam’s failure to take any steps to enforce the covenant, was that Fortwilliam may have become estopped by waiver from forfeiting the lease as a result of that breach. By contrast with the circumstances of the Howard de Walden and Selous cases and of Holme v Brunskill, Fortwilliam did not take the initiative to vary the terms of the lease. There was no agreement between Fortwilliam and Holdings on behalf of CEM to vary its terms, simply an acceptance of payment of the rent coming due under the lease by another company in the same group as Holdings and CEM pending negotiations to assign the lease to that company which situation was allowed to continue after those negotiations had broken down.’

Judges:

The Hon Mr Justice Evans-Lombe

Citations:

[2004] EWHC 979 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Topland Portfolio No 1 Ltd v Smiths News Trading Ltd CA 21-Jan-2014
The claimant landlord sought to recover arrears of its tenant’s rent after the tenant’s insolvency from the defendant under the defendant’s guarantee of the rent. The defendant had argued successfully at first instance that the guarantee had been . .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Company

Updated: 04 June 2022; Ref: scu.196620

Assetco Plc v Shannon: ChD 21 Mar 2011

Application for an interim mandatory injunction against the defendant, its Chief Executive Officer, and holder of 30% of its issued share capital. The injunction was sought to compel Mr Shannon to vote in favour of an equity placement by the Company in accordance with an alleged promise by Mr Shannon to do so contained in a deed of undertaking purportedly executed by him.

Judges:

Kitchin J

Citations:

[2011] EWHC 816 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Company

Updated: 04 June 2022; Ref: scu.431756

Cleaver, Bodden v Delta American Reinsurance Company: PC 1 Feb 2001

(Cayman Islands) In the course of trading the company had given security to carry on its insurance business. On its insolvency, the administrators required the creditor to bring into hotchpot credit received in a foreign jurisdiction. It was said that having obtained an advantage over other unsecured creditors for the amount secured, the claiming creditor should make available to all creditors the payment already received.
Held: The difference here, was that the payment received had arisen from a letter of credit, and had never been part of the insolvent company’s estate. Hotchpot applies only to assets regarded as part of the estate in liquidation. Rule 4.88 did not operate as an exception to the hotchpot rules. Appeal dismissed.

Judges:

Lord Steyn Lord Lloyd of Berwick Lord Cooke of Thorndon Lord Scott of Foscote Sir Patrick Russell

Citations:

Appeal No 5 of 2000, [2001] UKPC 6

Links:

Bailii, PC

Statutes:

Insolvency Rules 1986 4.88 4.96

Citing:

Cited – Banco de Portugal v Waddell HL 1880
There was both an English and a foreign insolvency, the debtors having traded as wine merchants in England and in Portugal. They presented a petition for their adjudication in bankruptcy in England in December 1877. Insolvency proceedings were taken . .
Cited – Selkrig v Davis 1814
Rules in Hotchpot . .
Cited – Ex parte Wilson 1871
Hotchpot principles . .
Cited – Moor v Anglo-Italian Bank CA 1879
The defendant bank had a mortgage over land in Florence belonging to a company in liquidation. The liquidator of the company applied to the court to restrain the bank from realising its security.
Held: The application failed. Jessel M.R. . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Commonwealth, Wills and Probate

Updated: 04 June 2022; Ref: scu.163274

CMS Dolphin Ltd v Paul M Simonet and Another: ChD 23 May 2001

The claimant asserted that the defendant had, having at one point been a creative director of the claimant, left to set up an alternate competing business, and diverted business from the first company to the new one. There had been disagreements about the extent of capital to be introduced. The defendant asserted that this happened after he had been marginalised within the old company and had resigned as director at the invitation of the other partner.
Held: The power to resign is not itself a fiduciary power. A resigning director could not take to himself a business opportunity maturing within the first company. He became a constructive trustee of that maturing business opportunity. In this case the defendant had so acted. He was liable personally even though the opportunity was pursued through a second limited company.
Lawrence Collins J said: ‘In my judgment the underlying basis of the liability of a director who exploits after his resignation a maturing business opportunity of the company is that the opportunity is to be treated as if it were property of the company in relation to which the director had fiduciary duties. By seeking to exploit the opportunity after resignation he is appropriating for himself that property. He is just as accountable as a trustee who retires without properly accounting for trust property. In the case of the director he becomes a constructive trustee of the fruits of his abuse of the company’s property, which he has acquired in circumstances where he knowingly had a conflict of interest, and exploited it by resigning from the company.’

Judges:

Justice Lawrence Collins

Citations:

[2001] EWHC Ch 415, [2001] 2 BCLC 704

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Canadian Aero Service Ltd v O’Malley 1973
(Supreme Court Canada) Mr O’Malley and Dr Zarzycki were senior officers of the claimant (‘Canaero’). Having attempted, unsuccessfully, to procure a contract for Canaero to carry out a topographical survey and mapping of part of Guyana, they resigned . .
Cited – Regal (Hastings) Ltd v Gulliver HL 20-Feb-1942
Directors Liability for Actions Ouside the Company
Regal negotiated for the purchase of two cinemas in Hastings. There were five directors on the board, including Mr Gulliver, the chairman. Regal incorporated a subsidiary, Hastings Amalgamated Cinemas Ltd, with a share capital of 5,000 pounds. There . .
Cited – Imperial Mercantile Credit Association v Coleman HL 1873
Where a company director puts the benefit of a company contract into a partnership, he is fully accountable even if his partners are entitled to part of the profit and are ignorant of his breach of fiduciary duty. . .
See Also – Profilati Italia SRL and Painewebber Inc v Painewebber International Futures Ltd ComC 23-Jan-2001
An award was challenged on the grounds that the successful party had failed to make proper disclosure.
Held: Moore-Bick J applied the test whether there was ‘any substantial likelihood that disclosure . . would have resulted in the tribunal . .

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 . .
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 – Smithkline Beecham Plc Glaxosmithkline UK Ltd and Another v Apotex Europe Ltd and others (No 2) CA 23-May-2006
The parties to the action had given cross undertakings to support the grant of an interim injunction. A third party subsequently applied to be joined, and now sought to take advantage of the cross undertakings to claim the losses incurred through . .
Lists of cited by and citing cases may be incomplete.

Company, Arbitration

Updated: 04 June 2022; Ref: scu.163019

In re Telewest Communications Plc: ChD 26 Apr 2004

A scheme of arrangement had been proposed. The creditor complained that in providing for payment in a currency other than that agreed, it had been prejudiced.
Held: The provision in the scheme did purport to alter the claimant’s rights.

Judges:

The Honourable Mr Justice David Richards

Citations:

[2004] EWHC 924 (Ch), Times 27-May-2004

Links:

Bailii

Statutes:

Companies Act 1985 425(1)

Jurisdiction:

England and Wales

Citing:

Cited – Sovereign Life Assurance v Dodd 1892
‘What is the proper construction of that statute? It makes the majority of the creditors or of a class of creditors bind the minority: it exercises a most formidable compulsion upon dissentient, or would-be dissentient, creditors; and it therefore . .
Cited – In the Matter of Drax Holdings Limited and in the Matter of InPower Limited ChD 17-Nov-2003
A company incorporated in Jersey comes within the Act for the purposes of the section. An English court has jurisdiction to wind up a foreign company if it has assets here or some other sufficient connection with this country. . .
Cited – In the Matter of Hawk Insurance Company Limited CA 23-Feb-2001
Arrangements for putting in place voluntary arrangements for companies. Discussing Sovereign Insurance: ‘When applying Bowen LJ’s test to the question ‘are the rights of those who are to be affected by the scheme proposed such that the scheme can be . .
Cited – Wight, Pilling, Mackey v Eckhardt Marine GmbH PC 14-May-2003
(Cayman Islands) An international bank went into liquidation in the Cayman Islands, with liabilities in Bangladesh. A new bank was created in Bangladesh, and the applicants sought to make the new bank liable, and through them the liquidators.
Cited – In re Humber Ironworks and Shipbuilding Co 1869
The assets of a company held on the statutory trusts should be distributed as if they had all been collected and distributed on the date of the winding up order: ‘I think the tree must lie as it falls; that it must be ascertained what are the debts . .
Cited – In re Anglo American Insurance Ltd 2001
. .
Cited – In re Richards and Co 1869
The court refused to sanction a scheme because it treated a creditor with preferential rights in a liquidation as an ordinary unsecured creditor. . .
Cited – Evans v Bartram HL 1937
When a defendant seeks to set aside a regular judgment which had been obtained by default, the test for setting it aside is: ‘In a case like the present there is a judgment, which, though by default, is a regular judgment, and the applicant must . .
Cited – Miliangos v George Frank (Textiles) Ltd HL 1975
The issue was whether an English court was able to award damages in Sterling only.
Held: The House distinguished clearly between the substance of the debtor’s obligations and the effect of English procedural law when a debt in a foreign . .
Cited – In re Dynamics Corpn of America ChD 1976
No allowance is made in an insolvency for exchange rate fluctuations which affect the sterling value of a debt in foreign currency after the date of the winding up order. The purpose of the rule that debts are valued at the date of winding up is to . .
Cited – In re Lines Bros Ltd CA 1982
The liquidators in a creditors voluntary liquidation converted foreign currency debts of the company into Sterling at the rate of exchange prevailing at the date of the resolution to wind up. As a result of the depreciation of Sterling against the . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 04 June 2022; Ref: scu.196064

In re Millenium Advanced Technology Ltd: ChD 2 Apr 2004

The company sought to have struck out as an abuse an application to have it would up on the just and equitable ground. The status of the authority as creditor was disputed.
Held: A petition was properly presented only if the petioner bona fide pursued some interest arising from the issue which gave him standing to apply. Where a creditor sought to pursue his private interests, the question went not as to its standing to issue the petition, but as to whether the application would be an abuse. The assertion of public interest issues did not deprive the authority of its locus standi to issue, and nor in this case was it an abuse. The existence of debts did not istelf resolve the issue of whether the just and equitable grounds were satisfied. The petition should be amended to pursue the ground that the company was unable to pay its debts.

Judges:

Michael Briggs QC

Citations:

Times 29-Apr-2004

Statutes:

Insolvency Act 1986 122(1)(g)

Jurisdiction:

England and Wales

Company, Insolvency

Updated: 04 June 2022; Ref: scu.196578

Express Newspapers v The Telegraph Group Ltd: ChD 31 Jul 2001

Judges:

The Vice-Chancellor

Citations:

[2001] EWHC Ch 2

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Appealed to – Express Newspapers v Telegraph Group Ltd CA 15-Mar-2002
The parties entered into a joint venture for the provision of printing resources. This survived until one member company changed hands, when there were disagreements about a shareholder’s agreement. There were difficulties of construction.

Cited by:

Appeal from – Express Newspapers v Telegraph Group Ltd CA 15-Mar-2002
The parties entered into a joint venture for the provision of printing resources. This survived until one member company changed hands, when there were disagreements about a shareholder’s agreement. There were difficulties of construction.
Lists of cited by and citing cases may be incomplete.

Company

Updated: 04 June 2022; Ref: scu.159878

Coleman Taymar Ltd and Others v Oakes and Another: ChD 19 Jul 2001

A company director owed a fiduciary duty to his company, but that could not, of itself, prevent him making arrangements to set up in competition once his employment by the company came to an end, save only for acts during the period of his employment. While the question whether a director has acted honestly is to be tested subjectively; the question whether he has acted reasonably is an objective one. That he was to set up the business did not prevent him claiming relief under the section. If he had behaved reasonably and honestly and within his duties, he could be entitled to relief whether the company claimed against him for breach of duty, or for an account of profit, or for damages. In this case he had gone behind the company’s back to negotiate to take over leases to the company, and was, to that extent, in breach. No damages would however be awarded for the period after the termination of his employment, but whilst he remained technically a director. Section 727 might apply so as to relieve a director of a duty to account which would otherwise have arisen because of a failure to disclose an interest.

Judges:

Reid QC J

Citations:

Times 03-Sep-2001, Gazette 13-Sep-2001, [2001] 2 BCLC 749

Statutes:

Companies Act 1985 727(1)

Jurisdiction:

England and Wales

Citing:

Applied – Scottish Co-operative Wholesale Society Ltd v Meyer HL 1959
Valuation of Shares on Order for Purchase
The Co-operative Society had formed a 51 per cent-owned subsidiary to manufacture rayon at a time of strict post-war controls. The other shares were owned by two outside directors with skill and experience in the trade. When these directors declined . .

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: 04 June 2022; Ref: scu.162932

Sir Elton Hercules John and Others v Price Waterhouse and Others: ChD 12 Jul 2001

The applicants were auditors to the company, and, having successfully defended a claim by the company, sought their costs on an indemnity basis, rather than on the standard basis as awarded.
Held: The auditors, as also for directors, were given a right under Table A to an indemnity, and that indemnity was not displaced by an otherwise comprehensive terms of appointment letter. Even though they might have the right to commence a second action to recover the difference between the costs award and their rights under the appointment, a court should be reluctant, in costs proceedings, to make an award on this basis. Even though the company may have no effective defence to a second claim, the costs in the case before the court should be on the standard basis.

Judges:

The Hon Mr Justice Ferris

Citations:

Times 22-Aug-2001, Gazette 06-Sep-2001, [2001] EWHC Ch 391, [2002] EWCA Civ 899

Links:

Bailii, Bailii

Statutes:

Companies (Tables A to F) Regulations 1985 (1985 No 805)

Jurisdiction:

England and Wales

Company, Costs

Updated: 04 June 2022; Ref: scu.159956

Shuttleworth v Secretary of State for Trade and Industry: ChD 9 Feb 1999

The discretion of the court to allow a disqualified company director to take on the duties of a director, is complete and is not to be fettered. Whether the reason for wanting to act is personal or for business is not decisive.

Citations:

Times 09-Feb-1999, Gazette 24-Feb-1999

Statutes:

Company Directors Disqualification Act 1986 17

Jurisdiction:

England and Wales

Company

Updated: 04 June 2022; Ref: scu.89249

Lloyd’s Register of Shipping v Societe Campenon Bernard: ECJ 6 Apr 1995

Actions which would be deemed to have been undertaken by a branch of company need not necessarily be performed where the branch is physically located.

Citations:

Times 03-May-1995, C-439/93, [1995] EUECJ C-439/93

Links:

Bailii

Statutes:

Brussels Convention1968 5(5)

Cited by:

Cited – Anton Durbeck GmbH v Den Norske Bank ASA CA 3-Feb-2003
Claimant cargo owners sought to have decided in England, their dispute with the respondent. The respondent was domiciled in a country signatory to the Convention, and had offices here.
Held: To establish jurisdiction for the English courts, . .
Lists of cited by and citing cases may be incomplete.

European, Company

Updated: 03 June 2022; Ref: scu.161219

In re T and N Ltd and Others (No 3): ChD 16 Jun 2006

The court considered the application of ‘the bankruptcy template of section 382 to the rules governing the winding up of companies’.
Held: The phrase ‘obligation incurred’ in Rule 13.2(1)(b) was inapt to describe a common law duty of care in negligence which existed on and was breached by a company before liquidation, but where actionable damage occurred only after the commencement of the liquidation.
Para (a) is concerned with liabilities to which the company ‘is subject’ at the date of the insolvency event, whereas para (b) is directed to those liabilities to which it ‘may become subject’ subsequent to that date, and that there is no overlap between these two categories.

Judges:

David Richards J

Citations:

[2006] EWHC 1447 (Ch), [2006] 1 WLR 1728, [2007] 1 All ER 851, [2007] Bus LR 1411

Links:

Bailii

Statutes:

Companies Act 1985 425, Insolvency Rules 1986 13.2(1)(b)

Jurisdiction:

England and Wales

Citing:

Applied – In re Sutherland, dec’d; Winter v Inland Revenue Commissioners HL 1963
The concept of a contingent liability was considered.
Held: In Scots law, a contingent liability is a liability which, by reason of something done by the person bound, may or may not arise depending on the happening of a future event.

Cited by:

Cited – Haine v Secretary of State for Business Enterprise and Regulatory Reform and Another; Day v Haine CA 11-Jun-2008
Former employees had obtained a protective award against the company for failing to consult on the impending redundancies and submitted proofs of debt to the liquidator who sought guidance from the court. The judge had held that since the Act . .
Cited – Employers’ Liability Insurance ‘Trigger’ Litigation: BAI (Run Off) Ltd v Durham and Others SC 28-Mar-2012
The court considered the liability of insurers of companies now wound up for mesothelioma injuries suffered by former employees of those companies, and in particular whether the 1930 Act could be used to impose liability. The insurers now appealed . .
Cited – In re Nortel Companies and Others SC 24-Jul-2013
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
Held: Liabilities which arose from financial support directions or contribution notices . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 03 June 2022; Ref: scu.242578

Re The People’s Restaurant Group Ltd: ChD 30 Nov 2012

Petition praying for (amongst other relief):
1.1 The restoration of The People’s Restaurant Group Limited (‘the Company’) to the Register of Companies.
1.2 Its winding-up to take effect retrospectively from 24 June 2010.
1.3 The suspension of any limitation period between the date of its dissolution and the date of determination of the Petition for any causes of action the Company or its liquidator may have.’

Judges:

Mr Registrar Jones

Citations:

[2012] EWHC B33 (Ch)

Links:

Bailii

Statutes:

Companies Act 1986, Insolvency Act 1986

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 02 June 2022; Ref: scu.569051

Roberts v Frohlich and Another: ChD 18 Feb 2011

The claimant, liquidator of ODL, sought relief in a declaration that the defendants, former directors of the company, were guilty of misfeasance and breach of duty by causing, procuring or permitting ODL to commence a development when they knew or ought to have known that it was speculative, inadequately funded, and bound to fail. The legal foundation of this head of claim was that they each owed (i) a fiduciary duty to ODL to act in what they honestly believed was in its best interests; (ii) a duty to ODL at common law to exercise reasonable skill and care in acting as directors, and (iii) ‘a duty, at a time when ODL was insolvent or insolvency was reasonably foreseeable, to have regard to the interests of creditors’.

Judges:

Norris J

Citations:

[2011] EWHC 257 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 02 June 2022; Ref: scu.429657

Rush Portuguesa Ld v Office National d’immigration: ECJ 27 Mar 1990

ECJ Articles 59 and 60 of the EEC Treaty and Articles 215 and 216 of the Act of Accession of Portugal must be interpreted as meaning that an undertaking established in Portugal providing services in the construction and public works sector in another Member State may move with its labour force which it brings from Portugal for the duration of the works in question . In such a case, the authorities of the Member State in whose territory the works are to be carried out may not impose on the supplier of services conditions relating to the recruitment of manpower in situ or the obtaining of work permits for the Portuguese work-force . However, those authorities may check whether an undertaking is not circumventing the provisions of Article 216 of the Act of Accession under the cloak of a provision of services .

Citations:

C-113/89, [1990] EUECJ C-113/89, [1990] ECR I-3905, [1991] 2 CMLR 818, [1990] ECR 1-1417

Links:

Bailii

Jurisdiction:

European

Cited by:

Cited – International Transport Workers’ Federation and Another v Viking Line Abp and Another CA 3-Nov-2005
An order had been made restraining the defendant trades unions from taking industrial action. The unions said the UK court had no jurisdiction.
Held: ‘It is at first sight surprising that the English Commercial Court should be the forum in . .
Applied – Raymond Vander Elst v Office des Migrations Internationales ECJ 1994
A Belgian service provider brought its Moroccan workers to France in order to carry out a demolition contract. The workers had been ‘lawfully and habitually employed’ in Belgium and they intended to return to Belgium after completion of the project. . .
Cited – Low and Others, Regina (on the Application of) v Secretary of State for the Home Department Admn 21-Jan-2009
In each case the applicant, a company based in Ireland had employed in its restaurants, Chinese nationals who were unlawfully present here. The company sought judicial review of the arrest of its employees.
Held: ‘None of the claimants had any . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 June 2022; Ref: scu.160258

Deakin and Others v Faulding and Others; Specialist Group International Ltd v Deakin and Others; etc: ChD 31 Jul 2001

Directors of a company authorised payment of bonuses, but the power to do so lay with the shareholders, not the directors. However, the beneficial owner of a share held for him by a nominee could give assent to a motion of the company at a general meeting. The company sought repayment of the bonuses.
Held: Where all the shareholders who could have voted, attended a meeting at which they assented to some act, they are to be treated as if that act had been taken at a shareholders meeting.

Judges:

The Hon Mr Justice Hart

Citations:

Times 29-Aug-2001, Gazette 13-Sep-2001, [2001] EWHC Ch 7

Links:

Bailii, Bailii

Jurisdiction:

England and Wales

Citing:

applied – In Re Duomatic Ltd ChD 1969
Payments were made by a company by way of remuneration to directors without complying with the company’s articles of association in that no resolution authorising the directors to receive remuneration had ever been passed in a general meeting of the . .
See Also – Specialist Group International Ltd v Deakin and Another CA 23-May-2001
Law upon res judicata – action estoppel and issue estoppel and the underlying policy interest whereby there is finality in litigation and litigants are not vexed twice on the same matter.
(May LJ) ‘the authorities taken as a whole tend to . .

Cited by:

Cited – The Secretary of State for Trade and Industry v Michael Hamilton Amiss, Jonathan Andrew Chapman, Roger Rex Ingles ChD 20-Mar-2003
The Secretary sought disqualification orders, under section 8 which left the court with a discretion as to whether an order should be made.
Held: It was not necessary to establish dishonesty to a Twinsectra standard to justify an order. The . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 June 2022; Ref: scu.159888

Pelling v Families Need Fathers Ltd: CA 1 Aug 2001

The claimant, a member of the company, a charitable company limited by guarantee, sought a list of the company’s members. This was refused, and the court used a discretion not to order the list to be produced. The applicant sought to lead a group intending to remove the present board of directors. He appealed on the basis that his motives were irrelevant, and no such discretion existed. The company argued that the release of the names would breach the Data Protection Act. The court held that the words of the section created a discretion. It would not be a breach of the 1984 Act to release the list, but the purpose of the section and the parties could better be met by an appropriate arrangement for him to be allowed to contact the members through the company.

Judges:

Lord Justice Jonathan Parker, Lord Justice Mummery, Mr Justice Wilson

Citations:

[2001] EWCA Civ 1280, [2002] 1 BCLC 645, [2002] 2 All ER 440,

Links:

Bailii

Statutes:

Companies Act 1985 356 (6), Data Protection Act 1984 34

Jurisdiction:

England and Wales

Citing:

Cited – Armstrong v Sheppard and Short Ltd CA 1959
The plaintiff had a path at the rear of his property. The defendant constructed a sewer under the path, and asked the plaintiff for permission. He gave it informally, not knowing at the time that he owned the land. The sewer was constructed. Though . .
Lists of cited by and citing cases may be incomplete.

Company, Information

Updated: 01 June 2022; Ref: scu.159872

Agnew and Kevin James Bearsley v The Commissioner of Inland Revenue, and Official Assignee for the Estate In Bankruptcy of Bruce William Birtwhistle and Mark Leslie Birtwhistle: PC 5 Jun 2001

(New Zealand) A charge had been given by a company over its book debts. The charge was expressed to create a fixed charge over debts uncollected when a receiver was appointed, so that on collection they became payable to the bank. Until the receiver was appointed, the charge claimed to be a floating charge, and subject to some limitations, could deal with them freely. The essence of a floating charge is that it is a charge, not on any particular asset, but on a fluctuating body of assets which remain under the control of the chargor. The ability to control the receipt of the asset, and thus take it out of the charge was inconsistent with a fixed charge.
Lord Millett said: ‘Property and its proceeds are clearly different assets. On a sale of goods, the seller exchanges one asset for another.’

Citations:

[2001] 2 AC 710, [2001] UKPC 28, [2001] BCC 259, [2001] 2 BCLC 188, [2001] Lloyd’s Rep Bank 251, [2001] 3 WLR 454

Links:

Bailii, PC

Citing:

Applied – In re Brightlife Ltd ChD 1987
Parties contractual freedom to be respected
A clause in a debenture gave a charge which provided that the chargor should not: ‘deal with its book or other debts or securities for money otherwise than in the ordinary course of getting in and realising the same which expression shall not . .
Reversed – In Re New Bullas Trading Ltd CA 12-Jan-1994
A company debenture, which purported to create a fixed charge on book debts, and a second floating charge over the proceeds when paid, was valid and effective to create a fixed charge. The chargee was not a bank, and therefore no facility could be . .
Questioned – Siebe Gorman and Co Ltd v Barclays Bank Ltd ChD 1979
It was possible to create a fixed charge over present and future book debts and on its true construction, the debenture granted to Barclays Bank Ltd in this case had done so. If the chargor of book debts, having collected the book debts, ‘[had] had . .
Cited – Street v Mountford HL 6-Mar-1985
When a licence is really a tenancy
The document signed by the occupier stated that she understood that she had been given a licence, and that she understood that she had not been granted a tenancy protected under the Rent Acts. Exclusive occupation was in fact granted.
Held: . .

Cited by:

Cited – National Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
Cited – National Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
Cited – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
Cited – National Westminster Bank plc v Spectrum Plus Limited and others HL 30-Jun-2005
Former HL decision in Siebe Gorman overruled
The company had become insolvent. The bank had a debenture and claimed that its charge over the book debts had become a fixed charge. The preferential creditors said that the charge was a floating charge and that they took priority.
Held: The . .
Cited – Van Der Merwe and Another v IIG Capital Llc ChD 13-Nov-2007
The parties had entered into a debt factoring agreement, under which repayment was sought of some $30m, and the claimants were said to have guaranteed the loan by the factor to their company. The court was asked whether the guarantors had the same . .
Lists of cited by and citing cases may be incomplete.

Banking, Insolvency, Company, Commonwealth

Updated: 01 June 2022; Ref: scu.159468

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.

Judges:

Lord Browne-Wilkinson Lord Lloyd of Berwick Lord Steyn Lord Cooke of Thorndon Lord Clyde

Citations:

Times 31-Oct-1997, [1997] UKPC 44

Links:

Bailii

Statutes:

Companies Act 1985 459, Companies Act 1981 (Bermuda) 111

Citing:

Distinguished – British American Tobacco Company Limited v Inland Revenue Commissioners HL 1943
The House considered whether British American had a ‘controlling interest’ in a subsidiary of its direct subsidiary. The company argued that ‘controlling interest’ equated to beneficial ownership. In rejecting that argument Viscount Simon said: ‘I . .
Distinguished – 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:
Distinguished – Barclays Bank Limited v Inland Revenue Commissioners HL 1960
A testator did have the control of a company within section 55(1) of the 1940 Act, by virtue of the fact that he held shares as an individual in his own right and also was entitled to vote as a trustee for a further allocation of shares (making . .
Cited – Daimler Co Ltd v Continental Tyre and Rubber Company (Great Britain) Limited HL 1916
The House considered the meaning of ‘control’ in the context of companies. Lord Parker of Waddington said: ‘I think that the analogy is to be found in control, an idea which, if not very familiar in law, is of capital importance and is very well . .
Cited – Gouriet v Union of Post Office Workers HL 26-Jul-1977
The claimant sought an injunction to prevent the respondent Trades Union calling on its members to boycott mail to South Africa. The respondents challenged the ability of the court to make such an order.
Held: The wide wording of the statute . .
Cited – CBS Songs Ltd v Amstrad Consumer Electronics Plc CA 1987
Persons other than the Attorney General do not have standing to enforce, through a civil court, the observance of the criminal law as such. However, Sir Denys Buckley considered that such a claim might be maintained as a representative action . .
Cited – Lonrho Ltd v Shell Petroleum Co Ltd (No 2) HL 1-Apr-1981
No General Liability in Tort for Wrongful Acts
The plaintiff had previously constructed an oil supply pipeline from Beira to Mozambique. After Rhodesia declared unilateral independence, it became a criminal offence to supply to Rhodesia without a licence. The plaintiff ceased supply as required, . .
Cited – Jenkin v Pharmaceutical Society of Great Britain 1921
At common law that a member of a company incorporated by Royal Charter is entitled to an order restraining the commission of acts outside the scope of the charter which may result in the forfeiture of the charter and the destruction of the society. . .
Cited – Dickson v Pharmaceutical Society of Great Britain HL 1970
The Society was concerned by the extension of the range of non-pharmaceutical goods sold in chemist’s shops and the effect which it might have on the quality and status of the profession, proposed a new rule for inclusion in the code of ethics and . .
Cited – Phillips v Britannia Hygienic Laundry Co Ltd CA 1923
A breach of the regulation does not give rise to an action for damages. The distinction between misfeasance and non-feasance should no longer have significance. Atkin LJ said: ‘one who cannot be otherwise specified than as a person using the . .
Cited – Dickson v Pharmaceutical Society of Great Britain HL 1970
The Society was concerned by the extension of the range of non-pharmaceutical goods sold in chemist’s shops and the effect which it might have on the quality and status of the profession, proposed a new rule for inclusion in the code of ethics and . .
Cited – Ebrahimi v Westbourne Galleries Ltd and Others (on Appeal from In Re Westbourne Galleries Ltd) HL 3-May-1972
Unfair Prejudice to Minority Shareholder
A company had operated effectively as a partnership between two and then three directors. No dividends had been paid, but the directors had received salaries. One director was removed and sought an order for the other to purchase his shares, or . .
Cited – National Westminster Bank Plc and Another v Inland Revenue Commissioners HL 24-Jun-1994
Shares are allotted to a person when that person acquires an unconditional right to be entered on a company’s register of members. The issue of shares only becomes complete after they are registered in the company’s books for the purposes of the BES . .
Cited – Bratton Seymour Service Co Ltd v Oxborough CA 1992
The company was set up to acquire and manage a property divided into flats which also included ‘amenity areas’ (tennis courts, swimming pool, gardens). It was argued that there should be implied into the articles of association an obligation on the . .
Cited – Scally v Southern Health and Social Services Board HL 1991
The plaintiffs were junior doctors employed by the respondents. Their terms had been collectively negotiated, and incorporated the Regulations. During the period of their employment different regulations had given and then taken way their right to . .
Lists of cited by and citing cases may be incomplete.

Company, Commonwealth

Updated: 01 June 2022; Ref: scu.159255

Secretary of State for Trade and Industry v McTighe: CA 1997

Morritt LJ, giving the judgment of the court, distinguished between the conduct of two directors, disqualifying one for twelve years and the other for eight. He said: ‘The period for disqualification is a matter for the discretion of the judge hearing the application to be exercised in accordance with the relevant principles. One such principle is the recognition of the categories of case indicated by this court in Re Sevenoaks Stationers (Retail) Ltd ‘

Judges:

Morritt LJ

Citations:

[1997] BCC 224

Statutes:

Company Directors Disqualification Act 1986

Jurisdiction:

England and Wales

Citing:

Cited – In re Sevenoaks Stationers (Retail) Ltd CA 1990
The court gave guidelines for the periods of disqualification to be applied for company directors under the Act. The maximum period of ten years should be reserved for only the most serious of cases. Periods of two to five years should apply to . .
See Also – Secretary of State for Trade and Industry v McTighe (No 2) CA 1996
The court accepted that it was misconduct for a director to pursue: ‘the policy of not paying the debts of creditors who are not pressing when it is known that the company has insufficient reserves enabling it to trade except at the risk of such . .

Cited by:

Cited – Cathie and Another v Secretary of State for Business, Innovation and Skills CA 1-Jun-2012
The directors appealed against disqualification orders made against them under the 1986 Act. Their company had become insolvent, owing substantial arrears of PAYE and NI contributions. The revenue had said that they had paid other creditors first. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 31 May 2022; Ref: scu.465968

Day v Cook: CA 26 Apr 2001

Citations:

[2001] EWCA Civ 592

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Webster v Sandersons Solicitors (A Firm) CA 31-Jul-2009
The claimant apealed against refusal of permission to amend his claim for negligence against his former solicitors by adding claims from 1993 and 1994 . .
Lists of cited by and citing cases may be incomplete.

Professional Negligence, Company

Updated: 31 May 2022; Ref: scu.147517

In the Matter of Hawk Insurance Company Limited: CA 23 Feb 2001

Arrangements for putting in place voluntary arrangements for companies. Discussing Sovereign Insurance: ‘When applying Bowen LJ’s test to the question ‘are the rights of those who are to be affected by the scheme proposed such that the scheme can be seen as single arrangement; or ought it to be regarded, on a true analysis, as a number of linked arrangements?’ it is necessary to ensure not only that those whose rights really are so dissimilar that they cannot consult together with a view to a common interest should be treated as parties to distinct arrangements – so that they should have their own separate meetings – but also that those whose rights are sufficiently similar to the rights of others that they can properly consult together should be required to do so; lest by ordering separate meetings the court gives a veto to a minority group. The safeguard against majority oppression, as I sought to point out in the BTR case ([2001] 1 BCLC 740 at 747) is that the court is not bound by the decision of the meeting. It is important Bowen LJ’s test should not be applied in such a way that it becomes an instrument of oppression by a minority. ‘

Judges:

Chadwick LJ, Pill LJ

Citations:

[2001] EWCA Civ 241, [2001] 2 BCLC 480

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Sovereign Life Assurance v Dodd 1892
‘What is the proper construction of that statute? It makes the majority of the creditors or of a class of creditors bind the minority: it exercises a most formidable compulsion upon dissentient, or would-be dissentient, creditors; and it therefore . .

Cited by:

Cited – In re Telewest Communications Plc ChD 26-Apr-2004
A scheme of arrangement had been proposed. The creditor complained that in providing for payment in a currency other than that agreed, it had been prejudiced.
Held: The provision in the scheme did purport to alter the claimant’s rights. . .
Cited – In the Matter of Drax Holdings Limited and in the Matter of InPower Limited ChD 17-Nov-2003
A company incorporated in Jersey comes within the Act for the purposes of the section. An English court has jurisdiction to wind up a foreign company if it has assets here or some other sufficient connection with this country. . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 31 May 2022; Ref: scu.147449

Kieth Platt v Colin Platt and Another: CA 13 Dec 2000

The applicant appealed an order setting aside transfers to him of shares in a family company, found to have been made after misrepresentation and a breach of fiduciary duty. Three companies owned by the family had fallen into difficulties, and the shares were transferred for nominal consideration, on the basis of representations made as to the liabilities of the company, and as to their later return. Later the company prospered, and they sought the return of their shares.
Held: The appeal was as to matters of fact. The judgment did not set out clearly the facts found on the issues now tested, but there was evidence upon which his findings could properly be based. There had been misrepresentation by the defendant. The measure of damages for a tortious misrepresentation is the sum necessary to put the claimant in the position he would have been in, if the misrepresentation had not been made. The judge should not have assessed damages on a partial realisation basis without discounting the assets for the value of the directors service contracts, which would have been costs in the realisation of the assets.

Judges:

The Vice-Chancellor Lord Justice Chadwick And Lord Justice Latham

Citations:

[2000] EWCA Civ 322

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Appeal from – Platt v Platt and Another ChD 19-Jul-1999
. .
Cited – Attorney General of Ceylon v Mackie PC 1952
The House considered how to value a company. The possibility that a business might be sold as a going concern for a price equal to the net realisable value of the assets employed was envisaged: ‘If it is proved in a particular case that at the . .
Lists of cited by and citing cases may be incomplete.

Company, Damages, Torts – Other

Updated: 31 May 2022; Ref: scu.147355

Lewis v Commissioner of Inland Revenue and others: CA 2 Nov 2000

The liquidator in a creditor’s voluntary liquidation sought a direction that he could take his costs of pursuing former directors in actions for wrongful trading and preferences, out of realised funds. It was held that nothing in the rules or Act supported the contention that such costs would be expenses of the voluntary winding up. There was no automatic priority of such expenses over preferential creditors, and the liquidator must look to the court’s discretion to recover any such costs.’Rule 4.218 tells us both what are the expenses to be treated as the expenses of a winding up and what priority they have inter se.’

Judges:

Peter Gibson LJ

Citations:

Gazette 30-Nov-2000, [2000] EWCA Civ 274, [2001] 3 All ER 499

Links:

Bailii

Statutes:

Insolvency Act 1986, Insolvency Rules 1986 (SI 1986 No 1925) 4.218(1) 4.220(1)

Jurisdiction:

England and Wales

Cited by:

Cited – Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc HL 20-Feb-2002
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Costs

Updated: 31 May 2022; Ref: scu.147307

Barry Clarke Cook (Her Majesty’s Inspector of Taxes) v Andrew John Billings and others: CA 7 Dec 2000

Between them, several shareholders held all the shares of a company, but each owned less than thirty per cent. They claimed BES relief. The tax inspector asserted that they were deemed to be associates of each other under the section, and that accordingly each had an interest in more than thirty per cent of the company, and the relief was not available. The definition of ‘associate’ was not to be artificially restricted.

Citations:

Times 16-Jan-2001, [2000] EWCA Civ 309

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 417(3) 291(8)

Jurisdiction:

England and Wales

Income Tax, Company

Updated: 31 May 2022; Ref: scu.147342

Trustor AB v Smallbone and others: CA 9 May 2000

Judges:

Sir Richard Scott VC, Buxton LJ, Gage J

Citations:

[2000] EWCA Civ 150

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Trustor Ab v Smallbone and others CA 19-Jan-1999
Appeal against refusal to allow the defendant, subject to a Mareva injunction, to charge his house to pay his legal fees. . .

Cited by:

See Also – Trustor Ab v Smallbone and Another (No 2) ChD 30-Mar-2001
Directors of one company fraudulently diverted substantial sums to another company owned by one of them. The defrauded company sought return of the funds, from the company and from the second director on the basis that the corporate veil should be . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 31 May 2022; Ref: scu.147183

Odyssey Re (London) Limited and Alexander Howden Holdings Limited v OIC Run-Off Limited (Formerly Orion Insurance Company Plc): CA 13 Mar 2000

There had been litigation between the two companies previously. The general manager and director had given evidence which was accepted by the judge and again on appeal. After his death and in other proceedings it became clear that he had perjured himself. The applicant sought to have the judgment set aside. Since the company could not itself give evidence, the question was whether the evidence of the director was that of the company allowing the judgment to be set aside. One question was the extent of his involvement in the preparation of the case. The test was described: ‘The rule on which this court acted in Boswell v Coaks, which I have held to continue to be the law, is that the fraud or perjury must be that of the party himself, or at least be suborned by or knowingly relied on by that party.’

Citations:

Times 17-Mar-2000, Gazette 30-Mar-2000, [2000] EWCA Civ 71

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Appeal from – Odyssey Re (London) Ltd (Formerly Sphere Drake Insurance Plc) and Another v OIC Run-Off Ltd (Formerly Orion Insurance Co Plc) Admn 15-Feb-2000
. .

Cited by:

Cited – Cinpres Gas Injection Ltd v Melea Ltd ChD 9-Oct-2006
The claimant had sought a declaration as to the ownership of a patent, and now said that a witness had procured his earlier judgment by perjury. The witness now said that he had formed his statement against a feeling of oppression by the threat of a . .
Lists of cited by and citing cases may be incomplete.

Company, Litigation Practice

Updated: 31 May 2022; Ref: scu.147104

Mahomed and Another v Morris and Others: CA 17 Feb 2000

Citations:

[2000] EWCA Civ 46

Links:

Bailii

Statutes:

Insolvency Act 1986 168(5)

Jurisdiction:

England and Wales

Citing:

Cited – 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: 31 May 2022; Ref: scu.147079

Environment Agency v Paul Clark (As Administrator of Rhondda Waste Disposal Limited): CA 10 Feb 2000

A waste disposal company was in insolvent administration. The Environment Agency sought to prosecute it for breaches of criminal law relating to its licenses.
Held: The bar on proceedings against a company in administration operated for criminal as well as civil proceedings. The section was intended to allow the company a breathing space. Nevertheless, a prosecution could be brought with leave.

Citations:

Times 02-Mar-2000, [2000] EWCA Civ 38

Links:

Bailii

Statutes:

Insolvency Act 1986 10

Jurisdiction:

England and Wales

Insolvency, Company, Environment

Updated: 31 May 2022; Ref: scu.147071

Smith (Administrator of Cosslett (Contractors) Ltd) v Bridgend County Borough Council: CA 19 Jan 2000

Citations:

[2000] EWCA Civ 1

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Appeal from – Smith (Administrator of Cosslett (Contractors) Limited) v Bridgend County Borough Council; In re Cosslett (Contractors) Ltd HL 8-Nov-2001
The standard building contract allowed a contractor to take plant and equipment from a site and sell it in payment of sums due under the contract, upon the other contractor becoming insolvent. It was said that this power amounted to a charge over . .
Lists of cited by and citing cases may be incomplete.

Company, Construction

Updated: 31 May 2022; Ref: scu.147034

John Flynn v Robin Thompson and Partners (a Firm): CA 24 Aug 1999

A partner in a firm of solicitors had been accused of two assaults by a lay representative of a claimant against the firm. The first related to an attempt to wrest papers from the claimant, and the second an assault outside the court. They were both wrongly categorised as a claim in vicarious liability. The defendant was a partner, and the liability of the firm lay in the Act. The second assault was clearly outside the scope of Acts within the partnership, and the first did not warrant the proceedings.

Citations:

Gazette 10-Feb-2000, Times 14-Mar-2000, [1999] EWCA Civ 2106

Links:

Bailii

Statutes:

Partnership Act 1890 10

Jurisdiction:

England and Wales

Vicarious Liability, Company, Torts – Other

Updated: 31 May 2022; Ref: scu.147021

In the Matter of Blenheim Leisure (Restaurants) Limited: CA 26 Jul 1999

Where an application is made to restore a company to the register, the court was free to look to the interests of third parties who might be affected and to allow them to protect those interests by being joined in the application. In this case undertenants of a lease held by the company had such an interest, because of the effects of the removal upon the renewal procedures.

Citations:

Gazette 02-Sep-1999, Times 13-Aug-1999, [1999] EWCA Civ 1963

Links:

Bailii

Statutes:

Companies Act 1985 653 (2B)

Jurisdiction:

England and Wales

Company

Updated: 31 May 2022; Ref: scu.146878

Mcgladdery v Mcgladdery: CA 21 Jul 1999

Citations:

[1999] EWCA Civ 1909

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See also – Mcgladdery v Mcgladdery CA 26-Sep-1996
Implementation of ancillary relief order for transfer of shares in family company. . .
See also – McGladdery v McGladdery CA 21-Jul-1999
A husband having been ordered to transfer his shares in a private company to his wife, found that she had breached the undertaking she had given as part of the order, and had used her majority shareholding to dispose of company assets out of the . .
Lists of cited by and citing cases may be incomplete.

Legal Aid

Updated: 31 May 2022; Ref: scu.146824

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 was dismissed. The right of set-off had effectively been excluded. ‘The meaning of general words, even ‘whatsoever’, may be limited by the context in which they appear. They may be used to refer to a class or category, a genus (or what Mr Pollock called a tribe) of which some but not necessarily all the members are identified in the clause. ‘ and ‘the hypothesis that the parties intended to exclude rights of set-off can be tested in this way: what words might they have used to make their meaning clear? There is not necessarily a magic formula, but words such as ‘payment in full without deduction or withholding of any sort’ are all familiar in contexts such as this. The failure of the parties to use any such words amounts to an eloquent silence. But this is not determinative of the meaning which the parties did in fact use. The phrase used, that is to say ‘not affected by … whatsoever’ does tend to include rather than exclude. That is to say, in the present case tends towards meaning that the payment of the full amount due shall not be affected in any way.’

Judges:

Evans LJ, Brooke LJ

Citations:

[1999] EWCA Civ 1293, [1999] 1 All ER (Comm) 970

Jurisdiction:

England and Wales

Citing:

Cited – Smith v UMB Chrysler (Scotland) Ltd HL 9-Nov-1977
The principles set out in Canada Steamship apply to ‘clauses which purport to exempt one party to a contract from liability’. The principles should be applied without ‘mechanistic construction’.
Lord Keith of Kinkel said: The tests were . .
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 – Mottram Consultants Ltd v Bernard Sunley and Sons Ltd HL 1975
Stone panels which had been fixed to the external walls of a school fell off, owing to defective fixing by the contractor.
Held: The contractor was liable for the cost of reinstating the stone panels, calculated at the date when the defect was . .
Cited – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Cited – 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. . .
Cited – Society of Lloyd’s v Leighs; Lyon and Wilkinson and Canadian Names Intervenors CA 31-Jul-1997
. .
Cited – Larsen v Sylvester HL 1908
A vessel was delayed by congestion for 9 days whilst waiting to load; she then loaded within the 84 hours allowed as laytime. The charterparty contained an exceptions clause which stated: ‘the parties hereto mutually exempt each other from all . .
Cited – Chandris v Isbrandtsen-Moller Co Inc CA 1950
The court considered whether an arbitrator could award interest in circumstances where section 3 of the 1934 Act expressly conferred such a power on ‘the court’ in proceedings tried in a ‘court of record’.
Held: Although section 3(1) of the . .
Cited – Tor Line AB v Alltrans Group of Canada (The ‘TFL Prosperity’) HL 1984
A roll-on roll-off liner tendered under a charter party did not conform to the description in the contract and the owners relied on a widely drawn exclusion clause.
Held: The owners’ argument failed. A literal interpretation would have . .
Cited – Connaught Restaurants Ltd v Indoor Leisure Ltd CA 17-Sep-1993
The lease provided the tenant would pay the rent ‘without any deduction’.
Held: The words ‘without any deductions’ in a lease were ambiguous and were insufficient to exclude the tenant’s right to claim a set off. Clear words are needed before . .
Cited – Marubeni Corporation v Sea Containers Ltd ComC 17-May-1995
Procedure – set-off – contract for supply of containers – construction of contract – clear words to exclude right of set-off – equitable set-off – abatement – defective containers. The words ‘without deduction’ have been held in the context of a . .
Cited – Beaufort Developments (NI) Limited v Gilbert-Ash NI Limited and Others HL 26-Feb-1998
The contractual ability given to an arbitrator under standard JCT terms did not oust the court from assessing and prejudging the acts of the architect under a building contract. As to the means for interpreting documents, Lord Hoffmann said: ‘I . .

Cited by:

Cited – Edlington Properties Limited v J H Fenner and Co Limited CA 22-Mar-2006
The landlord had assigned the reversion of the lease. There was an outstanding dispute with the tenant defendant who owed arrears of rent, but sought to set these off against a claim for damages for the landlord’s failure to construct the factory in . .
Lists of cited by and citing cases may be incomplete.

Contract, Equity, Company

Updated: 30 May 2022; Ref: scu.146208